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Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 I'd Secret DIRECTORATE OF INTELLIGENCE State Dept. review completed WEEKLY SUMMARY Secret 13 October 1972 No. 0391/72 Copy N2 49 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 WEEKLY SUMMARY, issued every Friday morning by Office of Current intelligence, reports and analyzes signif- developments of the week through noon on Thursday. equently includes material coordinated with or prepared he Office of Economic Research, the-Office of Strategic and the Directorate of Science and Technology. zpics requiring more comprehensive treatment and there- . published separately as Special Reports are listed in the WARNING 1 Egypt-USSR: Back to Acrimony 1 The Philippines: Suspended Animation 3 International Oil Developments 4 Indochina 8 Favorable Fall Fair Forecast 9 Korea: Frustration in Pyongyang 9 Burma: On Edge 7.0 Japan: An Eye on the Polls e WEEKLY SUMMARY contains classified information ecting the national security of the United States, within neaning of Title 18, sections 793 and 794, of the US amended. Its transmission or revelation of its con oor receipt by an unauthorized person is prohibited by CONTENTS (13 October 1972) MIDDLE EAST AFRICA 38 The Yemens: Aden Loses an Island 19 Uganda-Tanzania: Uneasy Truce Soviet Harvest Problems Persist Yugoslavia: Still More Trials EC: Nine for the Summit Norway: A Mini-Coalition Sweden: All Smoke and No Fire Portugal: Tightening Up 17 Sudan: Cairo Men Get the Ax ;?iJ Argentina: Peron's Initiative '2 Chile: Allende Afloat Ecuador: Petroleum Problems SPECIAL REPORT (Published separately) Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 WESTERN HEMISPHERE Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Iq Next 1 Page(s) In Document Denied Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 . lEgyptian complaints against the Soviet Union have been renewed despite Prime Minister Sidqi's scheduled arrival in Moscow on 16 Octo- ber. A Beirut weekly published an interview on 5 October in which President Sadat is quoted as saying that he brought the Soviet military pres- ence in Egypt to an end because the Soviets would not fight and had become "a burden to us." Sadat said the decision was intended to let the Kremlin know that Soviet strategy in the Middle East could not be fulfilled at Egyptian expense.-.a3 ,_ tCairo's public recriminations before Sidqi's arrival in Moscow may be a signal to the Soviets that the problems that led to the ouster of their military mission have not been resolved. Cairo may also intend its comments as a warning to Iraq and Syria of the dangers involved in too close a relationship with the Soviets. garding a possible Egyptian-Soviet summit when he speculated that under certain circumstances such a meeting might be "considered use- ;The Soviets, playing it cool, have not re- sponded to the new Egyptian criticisms and it appears that both are interested in some sort of reconciliation. The process could be difficult, and it will not be helped by the latest flurry of press attacks. Quddus' remarks about inadequate Soviet arms could indicate that the Egyptians intend to renew their requests for more sophisticated mil- itary hardware during the Sidqi talks in Moscow. If so, this is likely to add another point of con- tention to the reconciliation process. Quddus seemed to warn against too much optimism re- 'Following this presidential blast, the editor of the Egyptian newspaper, Akhbar al-Yawm, whose criticism in late August and early Septem- ber riled the Soviets, renewed his attacks on Moscow last weekend. The editor Ihsan Abd al- Quddus, resurrected charges that the Soviets had failed to supply Egypt with necessary arms. "Weapons that are not sufficient for a state to fight the war that has been imposed upon it are mere pieces of jewelry," he said. j (The Philippine population continues to show little sign of overt opposition to President Marcos' martial law declaration. The political arrests and stringent press censorship have not really im- pinged on the daily affairs of the average citizen. The long-suffering man in the street in Manila and elsewhere has, in fact, been gratified by improved conditions of law and order. He remains skeptical, however, and is waiting to see whether Marcos will indeed carry out the "New Society" reforms he has promised. ~I I Most of the reforms announced by Marcos- land reform, a streamlined bureaucracy, SECRET Page 1 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET enforcement of gun control-are much needed and highly popular. Thus far, however, he has made mainly token gestures toward implementing them, and it is by no means certain that he is willing or able to challenge directly the funda- mental economic and political interest groups that are responsible for much of the injustice in Philippine society. I iLand reform, for instance, has existed in one form or another since 1963, but it has not been vigorously put into effect. '.Marcos' actions since declaring martial law indicate that at this point he remains more con- cerned about his political future than the coun- try's economic problems. He is pushing the Con- stitutional Convention to finish its business so that the new document will be ready for ratifi- cation by a popular referendum; no date has been Even assuming Marcos encounters relatively smooth sailing, the imposition of martial law has permanently changed the Philippine political equation. Marcos apparently now sees himself as long-term strong man-whether as president, prime minister, or commander in chief-and in the future he will always be tempted to fall back on martial law again whenever his political control seems threatened. At the same time. Marcos' challengers-both within and outside the Filipino establishment-may be pushed to the conclusion that conspiracy and violence are the only means to achieve power. Communists and other extremists have long been advocating this line, and their credibility has now been en- SECRET Page 2 WEEKLY SUMMARY 13 Oct 12 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 INTERNATIONAL OIL DEVELOPMENTS jThe new look in the international oil busi- ness moved a step forward last week with a tenta- tive agreement that provides for participation by the Arab Persian Gulf members of the Organiza- tion of Petroleum Exporting Countries in Western oil company operations within those states. Saudi oil minister Yamani negotiated the pact on behalf of Saudi Arabia, Kuwait, Iraq, Abu Dhabi and Qatar, but the final agreement will not be signed until the five governments have ratified it_.J LUnder the tentative agreement, participation reportedly will begin at 25 percent, increasing gradually to 51 percent by 1983. Compensation to the companies probably will be considerably above net book value-a compromise between the two earlier positions. However, it will be substan- tially less than the full value of assets, including estimated oil reserves that the companies wanted. The companies will market a large part of the governments' share, at least in the first few years./ f fi'.> (Yamani believes that the Iraqis may balk at the tentative agreement, presumably because of the compensation arrangements. The nationalized Iraq Petroleum Company and Baghdad had hoped the participation agreement would provide an ;l opening for the settlement of their dispute, and an Iraqi rejection of the pact would complicate the matter. The company, trying to avoid a show- down while ratification is pending, recently announced that the moratorium on legal action against purchasers of the nationalized crude oil will remain in effect through December. i iLibya has jumped in with its own version of participation by demanding 50-percent ownership in the Bunker-Hunt Oil Company. Bunker-Hunt, once in partnership with British Petroleum in Libya, was given until 19 October to respond. The demand, which follows Tripoli's recent agree- lment with the Italian state oil company for fifty- rfifty partnership, probably will be made, in turn, on the other companies in Libya. Bunker-Hunt is clearly a logical choice for Libya to begin its participation discussions. The company is small and, in effect, is already a working partner with a Libyan national company, successor to British Petroleum: Bunker-Hunt has no written agree- ment and little say in operations. All the com- panies including Bunker-Hunt probably will adopt a unified stand in resisting the Libyan demands, even at the risk of complete nationalization, to avoid jeopardizing the tentative participation agreement with the Gulf states. In any showdown with Tripoli, the larger companies, with big opera- tions in the Persian Gulf, probably will provide oil to the smaller companies, like Bunker-Hunt, which have little or no -production outside SECRET Page 3 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 5bUNbT INDOCHINA WAR ON SAIGON'S DOORSTEP The Communists launched a series of hit- and-run attacks north of Saigon late last week. They are part of an ex ected October point," designe to put pressure on the South Vietnamese government and the US prior to the November elections. Government defense forces have clashed repeatedly with small Communist main force units around the town of Phu Cuong and at points along Route 13, less than 20 miles from the South Vietnamese capital. The Communists have been able to hold several hamlets briefly and have intermittently cut Route 13 north and south of Phu Cuong. 11 Much of the enemy fighting so far has been carried out by sappers and appears intended to mask the movement of additional main-force in- fantry units and supplies closer to Saigon `fEle- ~ments of two regiments of the North Vietnamese 7th Division have been ordered to infiltrate popu- lated areas in southern Binh Duong Province, but generally to avoid contact with government regu- _nlars for the time being.")$apper elements have moved into the south of the province. Most of the enemy troops are currently west and south of Phu Cuong along the Saigon River corridor, a tradi- tional approach route into the Saigon area. Gains in the Northern Provinces =South Vietnamese regulars in Quang Ngai Province have recaptured Landing Zone Dragon and have cleared portions of Route 1 that con- nect the province's five battered district capitals along the coast. In neighboring Quang Tin Prov- ince government forces have moved back into Tien Phuoc district capital, which had been held by the Communists for nearly a month. Farther north, in Quang Tri Province, South Vietnamese Marines captured a district capital just north of Quang Tri City in a limited offensive operation last weekend. SECRET Page 4 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET LThere has been some enemy resistance to South Vietnamese operations in this region, but the Communists appear to be primarily concerned with stockpiling supplies and regrouping their forces. j Security Slippage During Offensive !The government's pacification statistics indi- cate that local security declined significantly in both urban and rural areas during the first five months of the Communist offensive.,The statis- tics are from the government's Hamlet Evaluation System, an admittedly imprecise measuring tool, but one that provides a general picture of pacifi- cation trends; '.In March, just before the offensive was launched, the vast majority of the 6.5 million urban residents in South Vietnam were listed as living under full or partial government control. By August, the statistics show, the Communists had greater access to almost half a million of these people. Those affected live mostly in the suburbs around such cities as Hue, Da Nang and Qui Nhon and do not include some 42,000 people in district towns such as Loc Ninh and Dong Ha that have come under Communist control.' ij f. In the countryside, the deterioration of se- curity has been more pronounced. In March, the Hamlet Evaluation System listed some 11.5 mil- lion rural residents as under full or partial govern- ment control; by August the figure had dropped almost a million. Concurrently, the number of people living under full or partial Communist control more than doubled to over 1.7 million. Close to two million rural and urban resi- dents now either live in less secure conditions or are under greater Communist control than they --were in March of this year. The effect on the government's pacification program will be severe, SECRET Page 5 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET especially since several hundred key pacification officials have been killed, captured or forced to move. In Binh Dinh Province where the fighting has been very heavy, no village governments are currently operating in the northern three districts and only 36 of the remaining 55 elsewhere in the province are functioning. This disruption of local leadership, together with the increased Com- munist presence, will make the government's job of rebuilding its position in the countryside long and arduous. '. The North Vietnamese this week launched a major ground attack in North Laos against Vang Pao's only task force on the Plaine des Jarres. Preliminary reports on 12 October indicated that most forward units of the 2,700-man government Thn1 Heap Ban Nis gIaa r Communist at plc N. Government-held location Communist-held location Page 6 force on the southern tip of the Plaine were retreating after they had been hit with a large- scale ground assault supported by tanks and artil- lery. The three other regular task forces operating near the Plaine are making little progress. Ele- ments of one task force trying to move back toward the Plaine from the west have been unable to push through Communist blocking positions. Irregular units from the government's isolated stronghold at Rolaam I ong managed to move into positions overlooking Route 71, a major Com- munist supply route north of the Plaine, but most of them quickly withdrew when they came under Communist attack.' The Communists carried out an air strike against Bouam Long itself on 9 October, the first Communist air attack in north Laos in four years. The brief bombing and strafing attack did not cause any suhstantial damage or casualties- - While the conflict in the north drags on, government and tao Communist representatives in Vientiane have been moving ahead with ar- rangements to receive a Pathet Lao negotiating delegation that is scheduled to arrive in the Lao capital on 14 October', The delegation will be headed by Phoune Sipraseuth, a high-ranking Lao Communist leader- He was also Sorphanouvong's representative in September 1970 when an earlier effort was made to get talks started;, Chief govern- ment negotiator Pheng Phongsavan and Lao Com- munist representative Soth Phetrasy recently an- nounced that they have agreed on such matters as housing for the Communist delegation and a site for the talks in Vientiane. ;'Cambodians had little to cheer about as the Khmer Republic began its third year on 9 SECRET --- Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET October. In a dramatic prelude to the anniversary, Vietnamese Communist sappers on 7 October carried out a destructive raid in Phnom Penh's northern quarter. The attack, which was the first significant Communist ground action in the capital area since early May, resulted in consider- able damage to one of Phnom Penh's two major bridges and in the loss of several Cambodian Army armored personnel carriers. Government se- curity troops claimed they killed most of the estimated 100-man sapper force. Nonetheless, the ease with which the Communists struck raised fresh public concern over the government's mili- tary capabilities. I )The Cambodian Army also continued to fare poorly against the Communists on battlefields in the countryside. In Takeo Province, attacks by Vietnamese and Khmer Communist troops dis- rupted government operations aimed at clearing a portion of Route 2 and forced the Cambodians to withdraw from their few remaining outposts on the highway between Takeo and the South Viet- nam border. The Communists probably are trying to expand their logistic corridor that runs through this area into the South Vietnamese delta.' In the northwest, government units in Kom- pong Chhnang Province made no real progress in their efforts to reopen a short stretch of Route 5 between Kompong Chhnang City and the town of Oudong. Even if the Communists should be driven away from the highway, however, several damaged bridges will have to be repaired before regular truck convoys can move rice from Bat- tambang Province to Phnom PenhlfSince these repairs probably cannot be completed until early next month, the government will have to con- tinue to rely on uncertain deliveries of imported rice to maintain Phnom Penh's reserves. A Preparing a New Government L In addition to trying to cope with mounting military and economic problems, Lon Nol has had no little difficulty in forming a "government of national union"-which he reportedly hopes to unveil as soon as possible. The President's efforts -)to enlist the services of such prominent opposi- -)tionists as Republican Party chief Sirik Matak and Democratic Party head In Tam have been com- plicated by some key members of his own Socio- Republican Party, who are reluctant to share any power or authority with rival political groups. As things now stand, if any Republicans or Demo- crats do enter the government, they probably will 25X1 be given relatively minor portfolios in what will be a reshuffled cabinet rather than a more ef- SECRET Page 7 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET FAVORABLE FALL FAIR FORECAST d j,, The month-long fall session of the semi- annual Canton Trade Fair opens on 15 October and is expected to match or surpass the spring fair when a record of over $1 billion in contracts were signed. The Chinese economy has been per- forming well-industrial production is running roughly 10 percent higher than in 1972-and interest in trade with China is growing. Chinese export contracts could surpass the $700-$800 million level of the spring fair. The Canton Fair has been reverting to its role of being primarily an export fair, and no large increase in Chinese import contracts is anticipated over the spring total of $300-$400 million. Negotiations in Peking and purchasing missions abroad are assuming a greater role in Chinese purchases. Attendance may exceed the record 8,000 traders who came this spring, as China continues to expand its economic relations with non- Communist countries. Japanese businessmen will again be the largest contingent and may improve on the $200 million in contracts signed in the spring. More representatives from the less- developed countries are expected, and purchases should rise. A number of these countries will order goods under Chinese aid agreements to be sold at home to finance local costs of Chinese aid projects. The US contingent at this fair will probably exceed the group of about 30 that attended the spring fair. Some 15 US businesses are known to Inspecting machine display have received invitations. As with the spring fair, these are mostly small firms and trading com- panies primarily interested in imports. This spring, US importers purchased about $5 million in Chinese goods, mostly foodstuffs, fireworks, carpets and drugs. Since these firms are now more familiar with Chinese trade procedures and with the demand in the US for Chinese goods they are likely to buy more. Higher import tariffs for Chinese goods and labeling requirements by the Food and Drug Administration for foodstuffs, however, may discourage some traders. No major Chinese purchases of US goods are expected at the fair although three major US export firms will be represented. RCA and Western Union will probably discuss future Chinese purchases of communications equipment and the textile division of Monsanto will explore the market for its products in China. Page 8 SECRET Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET '' (North Korea has adopted a tougher propa- ganda line on North-South negotiations, probably because of its dissatisfaction with the recent round of Red Cross talks and its defeat on the Korean question in the UN)jEchoing comments by Kim II-sung in a recent interview, Pyongyang now claims that the South is refusing to imple- ment the agreement to achieve national unifica- ?,;7 tion contained in the joint communique on 4 July. T; / lGovernment anxiety over possible terrorist communique. Seoul is determined to preserve its present policies despite the North Korean pres- sure. This determination was underscored by Pres- ident Pak Chong-hui in his 1 October Army Day25X1 address. He stressed that the nation must con- tinue to build its military and moral stren th to deal with the North Korean Communists. activity by rebels supporting exiled prime minis- ter U Nu has led to large-scale arrests of suspected U Nu sympathizers. Up to 1,200 may now be under detention. Foremost among them is ex- Brigadier Aung Gyi, once a colleague of Prime Minister Ne Win but out of favor for nearly a decade because of opposition to Burma's socialist course.) ,1() ZThe current jitters were touched off by the arrest in Rangoon last week of an infiltrator who described a program of armed terrorism in the capital to be carried out by saboteurs trained in the exiles' bases in ThailandfA subsequent an- s' ' nouncement over the rebel radio that this would North Korean spokesmen at home and begin on 10 October added to the government's abroad are alleging that Seoul's military prepared- case of nerves. Until recently, the threat posed by 7ness exercises, its continued reliance on the UN i?' U Nu's resistance movement along the Thai and US military presence, and the existence of I border has been discounted, with some justifica- anti-Communist laws and emergency legislationA tion, by Rangoon. The government has been dis- are in direct violation of the agreement. Like the turbed by deeper rebel penetrations which may Kim interview, the recent propaganda stops short be aimed at exploiting the unrest caused by of threatening to break off the negotiations. Its threatening tone, nonetheless, points up Pyong- yang's frustration with the talks and lays the groundwork for blaming Seoul for anything that goes wrong in the future.] Burma's rice shortage.] I % ,The government probably feared that those arrested would become focal points for open popular resistance-something which has so far been prevented by tight security controls. The extreme overreaction on the part of the govern- ment could be due in part to Ne Win's depression following the sudden death of his wife on 1 October. The prime minister, prone to paranoic behavior under the best of circumstances, may now become even more erratic, adding to the ?,; 1 Pyongyang will probably raise these charges' at this week's initial meeting of the co-chairmen of the high-level Coordinating Committee, but the ~tharges will have little impact on Seoul. The South Koreans are confident of their ability to /1 deal with the North and are likely to counter with .;- allegations of their own that Pyongyang's invec- tiveis a violation of the spirit of the joint/ atmosphere of instability in Rangoon. SECRET 2X5 Page 9 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET c{$ JDespite Prime Minister Tanaka's repeated assurances that general elections will not be called until 1973, the government's decision to schedule an extraordinary session of the Diet paves the way for elections this year. The Diet, which will convene on 27 October to review the Honolulu and Peking summits and to pass a supplementary budget, could be dissolved in early November, allowing the vote to be scheduled as early as the first week in December.\ ?Stimulated by the influential press, an e ection mood has seized the country and in- creasing numbers of ruling Liberal Democratic Dietmen believe that the election will take place soon. Tanaka's close advisers are engaged in detailed planning for the election, and last week Komeito party officials reportedly moved their campaign apparatus into full gear. The Socialists and Communists have been preparing since last July..? By calling elections this year, the ruling, party would be trying to capitalize upon the "Tanaka boom." The prime minister is receiving unprecedented support in the national polls, but as the glow of the Sino-Japanese summit begins to dim, media and public attention will begin to focus on domestic affairs, and the Tanaka ad- ministration is more vulnerable to charges that it has failed to deliver on promises of reform at home. Postponement until next year could have one advantage for the government, the opposition parties with limited war chests will probably have spent their campaign resources by early 1973. ;.Whatever Tanaka decides on timing elec- tions, the Liberal Democrats may well lose up- wards of 20 Diet seats, restoring to the Socialists part of the massive losses they suffered in the last election in December 1969. Nonetheless, the rul- ing party will retain a comfortable majority in the Lower House. It would still be a vote of con- fidence and should strengthen Tanaka's hand in implementing controversial trade adjustment and environmental cleanup programs. SECRET 25X1 25X1 Page 10 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET SOVIET HARVEST PROBLEMS PERSIST The grain harvest is still behind schedule, Deteriorating weather conditions jeopardize its completion. According to the Soviet press, as of 2 October only 91 percent of the crop had been threshed compared with 98 percent in an average year. One week later, all grain had been threshed in North Kazakhstan, leaving about 13 million tons to be harvested, primarily in the Urals and Siberia. Rain has complicated the harvest and overtaxed grain drying facilities in some areas. Since 5 October snow and sleet have fallen in parts of Siberia, threatening to halt harvest opera- tions there. Although most of the unharvested crop could be salvaged in the spring, it probably would not be fit for human consumption. [, )Declining prospects in the New Lands fol- `lowing the drought in European Russia probably prompted the recent public admissions by Soviet officials that the harvest would be poor. They now say this year's grain crop will be no more than 160-167 million tons compared with the 181 million tons harvested in 1971. We estimate that gross grain production will be 160 million tons, but that net usable grain-gross output less mois- ture and waste-will be only 128 million tons-20 million tons below last year. :The leadership is attempting to convince the Soviet consumer that all steps are being taken to Frankfurter Allgemeine Zeitung ensure an adequate supply of food this winter. Hinting at the huge foreign grain purchases- about 28 million tons for delivery by mid-1973- an agricultural official said, "Additional measures have been taken to satisfy the nation's normal grain requirements." The Soviets are also reported to be buying an unprecedented one million tons of potatoes from Poland. The Soviet potato crop was another victim of the drought. [The food supply situation in Moscow appears to have improved after a spate of reports in August of food shortages and high prices on Moscow's open markets. Provincial towns in the drou ht areas may still be having supply prob- lems. YUGOSLAVIA: STILL MORE TRIALS {.Croatian courts last week convicted nine former student leaders and put three intellectuals in the dock on charges of masterminding the attempted take-over of Croat political institutions in 1971. /Three of the student leaders received prison sentences of three to four years, while six lesser figures drew sentences ranging from six months to three years. Because most of them were charged with crimes carrying a maximum penalty of 15 years, the sentences were relatively light The students' supporters, however, can find little to -cheer about. The courts, aware that the student leaders will be eligible for reduced sentences pending good behavior, took the added precau- tion of forbidding them to address public rallies or the news media during the entire term of their sentence. With the student leaders out of the way, the trials rolled on to the opening of the case against three Croat intellectuals who were active in the SECRET Page 12 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 J SECRET Matica Hrvatska (Mother Croatia) cultural soci- ety. These trials will produce a series of inflated charges, ponderous and sensation-seeking testi- mony from prosecution witnesses, flat denials by the accused, and, presumably, ultimate convic- tion),One new wrinkle might be an attempt to revive charges that the intellectuals conspired with emigres and through them with Western intelligence. Recent terrorist acts by Croat emigres have created an atmosphere conducive to such charges..] !.Once the Matica Hrvatska leaders have been dealt with, the regime in Zagreb will have dis- posed of most of the prominent Croatia-firsters. The decision to exempt Croatian party leaders, already purged, from trial seems to be holding firm, and the party next will address matters such as the upcoming third party conference. In view of the aura of depression in the republic, how- ever, party leader Milka Planinc will proceed cautiously, CMany in Belgrade will be glad to see the end of the political trials in Zagreb. They have caused adverse publicity in the West, produced unwel- [The most specific outcome will be the crea- tion of a European Monetary Cooperation Fund, which would be an integral part of any future economic and monetary union of the nine. The fund has been a main objective of the French, but in order to get it, they had to compromise. The West Germans have been able to limit the fund, for the time being at least, to the provision of short-term credits to alleviate temporary financial difficulties. Bonn also successfully insisted that any movement toward monetary union include steps toward economic policy coordination, especially against inflation. High-level meetings in preparation for the summit have shown, however, that anti-inflation policies will be difficult to devise on a community basis. (Any immediate strengthening of the EC institutions will likely be confined to a few minor changes. France and Germany have agreed not to raise the question of major institutional reforms, and the British are saying they need experience in the present bodies before suggesting changes. A political secretariat is unlikely to be discussed at all. France has demanded it be located in Paris; the others insisted on Brussels;) come praise from the Soviets, and inspired a {Although the Dutch consider it a matter of feeble effort by the Czechoslovaks to identify the "national interest" that the European Parliament trials of Dubcek supporters with those in Croatia. be both strengthened and directly elected through In Belgrade, as elsewhere, it is realized that the universal suffrage, these issues are likely to be trials have not dulled the Croats' inbred sense of remanded again for further study. The UK, Italy, being dominated by the Serbs. and Denmark will argue strongly for effective EC 1 'The six present and three prospective mem- bers of the European Communities will hold their first summit meeting in Paris on 19-20 October. The meeting will affirm the already-agreed steps toward European economic and monetary union and will attempt to emphasize European integra- tion after the setback in the Norwegian EC refer- endum and the French threats to postpone the summit. would increase the EC's jurisdiction, but it will take time to draw up meaningful programs.] EC relations with the rest of the world will receive low priority at the summit. It is doubtful that the nine will establish mechanisms for con- sulting with the US beyond those that already exist. The summit may declare an intention to maintain favorable relations with the less devel- oped countries by improving the EC's generalized preference system and increasing development aid. The summit will probably reaffirm an EC intention to participate constructively in the com- es `I prehensive trade negotiations on industrial and agricultural trade scheduled for 1973.1 SECRET Page 13 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET The meeting will be important in the na- tional context. Chancellor Brandt will be seeking to improve his European image before the West German elections on 19 November. President Pompidou can only hope that the accomplish- ments of the summit will counter his govern- ment's poor performance in the EC enlargement referendum last April and the failure of France to have its way on the political secretariat issue. The summit will, of course, provide a ceremonial welcome to Ireland, Denmark, and the UK, which become EC members on 1 January 1973, sig- nifying a political success for the governments in all three countries. i. r The selection last week of Christian People's Party chairman Lars Korvald to form a 21/2-party mini-coalition was the bare minimum Oslo could put together after the EC referendum brought down the previous government. The coalition, if realized, would have only 39 of the 150 seats in parliament, making it extremely difficult to govern until new elections next September. i )The coalition would bring together the Center and Christian People's parties and the five Liberal Party members who opposed EC entry in parliament. The Center Party, with 20 seats, would be the senior partner. The selection of Korvald to head the coalition probably was a sop to get his party to join the government. The Christian People's Party is conservative at home and supports Norway's participation in NATO and the UN. The addition of the large Conservative Party would have given such a government a majority in parliament, but such a coalition does not seem possible at this time. Conservative Party chairman Kare Willoch, whose party supported EC member- ship, has reiterated his position that only those parties which opposed EC entry should partic- ipate in the government which now has to nego- tiate an alternative free trade agreement. Former prime minister Bratteli has also blocked the par- ticipation of his Labor Party by vowing, before the referendum, not to participate in any coa- lition if Norway failed to enter the market. i i IA farmer and teacher, Korvald, 56, has been chairman of his party since 1967. He is a rather colorless politician and has been mainly con- SECRET Page 14 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET G~ Social Democrats, meeting in Stockholm last week, staged one of their most uneventful gather- ings in recent history. Despite the participation of Madam Binh in the opening ceremonies and the plethora of pro-Hanoi sentiment J,, the rumored ' .concessions to the party s left wing failed to materialize. The party leaders skillfully deflected demands for immediate recognition of East Ger- many, North Korea, and the Viet Cong. The left- ists did manage to carry the day on resolutions for defense cutbacks and an increase in foreign aid. Prime Minister Palme displayed firm control of the party by his careful management of the congress. 3 rr: . J The party expressed serious concern over incursions by the Center Party into Social Demo- cratic constituencies. Several Social Democratic officials, including Finance Minister Strang and labor organization chairman Geijer, criticized the [Center Party's conservatism and spoke in dismay of the disappearance of inter-party cooperation. Center Party chairman Thorbjorn Falldin, who could head a non-Socialist coalition if the three opposition parties were to win the election next year, was the obvious target of such criticism. The popular Falldin poses a serious challenge to Palme, and the Social Democrats are trying to put down the competition,,Jhey did not improve -their position by much, since the congress failed to come up with specific suggestions to relieve voter anxieties over high taxes, rising prices, and the soft job market,issues that promise to dom- inate the election campaign. SECRET Page 15 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET ?The new decree law strengthening the Portuguese political police, now known as the Directorate General of Security, will help the government deal with current problems and re- flects increased concern about terrorist groups. The new law condones certain current police practices and confirms the directorate general's responsibilities in security matters. Some of this had been played down since Prime Minister Caetano reorganized the security police in 1969.`,. ' The new law raises the authorized strength of the political police by 13 percent and increases salaries. It also exempts them from the most important of the penal code reforms that became effective on 1 October, the same day the new law was issued. In those overseas territories where "grave subversive acts" are occurring, complete exemption is given. In Portugal itself, it is released from reform provisions such as the mandatory presence of a defense lawyer during interrogation of a suspect and the preparation of pre-trial fact- finding dossiers by a judge rather than the police. The law also sanctions the current practice of issuing arrest warrants and authorizes active and retired "higher functionaries" of the service to carry arms without a license. ;These increased police powers represent an intent to deal more aggressively with several small but active terrorists groups whose sporadic at- tacks over the past two years have embarrassed the government. Last month, a communications station near Lisbon was bombed. In July, another bombing heavily damaged 13 new troop transport vehicles in Lisbon. The "revolutionary brigades," reportedly associated with a dissident Communist group in Algiers, claimed responsibility for these acts and for several acts of sabotage last year. ,Another terrorist organization, Armed Revolu- tionary Action, is reportedly linked to the orthodox Portuguese Communist Party. These terrorists have been setting off explosives since the fall of 1970. Both organizations aim to demonstrate opposition to the Caetano govern- ment, to the war in the African provinces, and to Portugal's link to NATO.'; The limitations on civil rights imposed by _1 1. the new law and the failure of the penal reform to cover political offenses swings Caetano further to the right. His earlier efforts to bring in new blood to modernize the government have been reversed. The undersecretary of state for planning, whose liberal reform proposals alarmed the far right, was pushed out in November 1971. Last August, Caetano removed from his cabinet the two chief economic reformers whose modernizing efforts threatened the monopolies of powerful regime backers. The government has also threatened to ban a number of the opposition-oriented coopera- tives that have used their status as economic or- ganizations to criticize the regime. Pre-publication censorship of the press has been extended indefi- nitely, although the press law passed last year had provided for its abolition. The organic law for the overseas provinces promulgated in May granted less autonomy than critics of the overseas rela- tionship had wished; Caetano insisted on main- taining Lisbon's control. SECRET Page 16 WEEKLY SUMMARY 13 Oct 12 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SUDAN: CAIRO MEN GET THE AX J LThe most important aspect of the cabinet '/ iNumayri had already purged a number of changes in Khartoum this week is the ouster of r, ministers and lesser officials who favor close ties the remaining ministers known for their pro- with Cairo to demonstrate his displeasure with E gyptian sympathies. They have been in obvious;':what he views as Egyptian meddling. The new trouble for some time as Sudan-Egypt relations have deteriorated over the past year. The im- mediate cause for their removal was the sharp attack in the Egyptian press late last month against Sudan's interception of Libyan troop transports en route to Uganda. Relations were moving toward an open break when Egypt re- quested Sudan to withdraw its units stationed along the Suez Canal. At the week's end, how- ever, a final break had still been avoided.'] government is ostensibly intended to set the stage for the convening on 12 October of a constituent assembly, the first since Numayri came to power in May 1969. The whole process is to lead to the drafting of a constitution next yearly 'ln the cabi- net reshuffle, Numayri retained the prime minis- ter's post and the defense ministry. The key port25X1 folios of foreign affairs, interior, and economy are held b carr -ovens from the previous cabi- net. SECRET Page 17 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET THE YEMENS: ADEN LOSES AN ISLAND :.Relations between the two Yemens reached a new low following the seizure of Aden's Kamaran Island on 6 October by Adeni dissidents of the National Unity Front.}The dissidents, who had the approval, and probably the support, of the Sana government, encountered little resist- ance and captured about 20 Adeni soldiers. ,,, Kamaran is more than 150 miles from Yemen (Aden), and lies only one and one-half miles off the coast of Yemen (Sana). It is sparsely popu- lated, mostly by fishermen. It was occupied by the British in 1915 and administered by them from Aden until late 1967 when Yemen (Aden) became independent and succeeded to that responsibility. I Aden has charged that the take-over was the work of the army of Yemen (Sana) and has threatened to use force if Kamaran is not restored to Aden's control.Up to now, the Aden govern- ment has generally chosen to soft-pedal Sana's role in the activities of Adeni dissidents, pre- ferring to place the blame on "mercenaries and reactionaries backed by imperialist powers." An attempt by Aden to recover Kamaran using mili- tary means seems out of the question, but Aden YEMEN may retaliate by occupying a portion of Sana's territory. ` The border between the two Yemens saw further fighting during the week between dissi- dents, who are showing surprising persistence, and the Adeni Army. On 11 October Aden charged that attacks with armor and artillery had been resumed by the Yemen (Sana) Army in the Ad Dhali region-about 65 miles from the city of 'Aden.\,There is no confirmation of participation by Sana regulars in this fighting, and it may reflect continuing activity by National Unity Front dissidents known to be in the area. Pressure for action against Aden is building in Sana, according to the US Embassy there. New dissi- dent incursions are considered likely and, in addi- tion, there are reports that large numbers of Yemen (Sana) tribesmen are moving toward the border. ~? `) ' Meanwhile, a five-member contingent from the Arab League is now attempting to get the two Yemens to ease the fighting which began in mid- September. The mediators do not appear to have 551555 6-71 SECRET Page 18 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Aden ch 5'- Ad ohali new attacks 25X1 25X1 25X1 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 I..", ShUKI I "W" UGANDA-TANZANIA: UNEASY TRUCE The peace agreement signed by the two ', ?Nyerere is unlikely to expel his friend Milton countries last week in Mogadiscio has eased ) Obote, Uganda's ex-president, and his followers tensions a bit, but sharp differences remain and ;-(-"from Tanzania, from which they launched their _,,hostilities could easily recurzj,_Under the auspices abortive effort to overthrow Amin. There was no of Somalia and the Organization of African reference to Obote in the Mogadiscio agreement, Unity, Uganda and Tanzania agreed to cease all .\butj[Ugandan President Amin has repeatedly said military and propaganda activities directed against that there will be "no peace" between the two each other and to withdraw all troops six miles countries as long as Obote and his supporters from the border. Each of the two countries also remain in Tanzania. J agreed to refrain from harboring or allowing "subversive forces" to operate against the other and to release any nationals or property of the other side:? d : Uganda and Tanzania have welcomed the truce,, but it could easily be broken by new flare- ups:j )The mutual withdrawal of troops is to be observed by Somali officials, but their presence will be only temporary. The pledge to stop pro- viding refuge to "subversive, forces" could be the major stumbling block. ,) Tanzanian President Any real resolution of the dispute between Uganda and Tanzania probably awaits a meeting between Amin and Nyerere. Nyerere, however, refuses to recognize Amin's government or to meet with the general. Amin, for his part, has agreed to such a meeting, but he continues to rail against Nyerere and Tanzania, most recently with charges that Tanzania and other countries are planning to invade Uganda next month. [Underscoring the fragility of the Mogadiscio agreement, Somali President Siad made quick trips to Kampala and Dar es Salaam immediately after the agreement was signed. Siad probably was urging Amin and Nyerere to move quickly to implement the agreement. He may have tried to soften Nyerere's stand on the Amin regime and to set up a meeting between the two, possibly at celebrations in Mogadiscio on 21 October marking the third anniversary of the Somali coup. Nyerere has accepted an invitation, but he prob- ably will back out if Amin agrees to attend. 1, .Meanwhile, repression of real or imagined opposition elements in Uganda continues. Several important Baganda tribesmen have been killed, detained, or have "disappeared." Acholi and Lango made up most of the guerrilla force that invaded Uganda last month, and many of their tribesmen have been murdered by army troops. The army itself is badly riven by tribal frictions, and discipline is uncertain. Some departing Asians are being robbed, beaten, or killed, and police have started to pick up university students. Secu- rity forces have avoided incidents with white resi- dents during the past few weeks, but with Amin's announcement of a new invasion threat and the could quickly change for the worse. uneasy atmosphere in Kampala, the situation SECRET Page 19 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET Malagasy Republic FIVE MORE YEARS 'General Ramanantsoa's government received over 90 percent of the vote in the referendum on 8 October. The vote gives his government a five- year mandate and abolishes the office of presi- dent held by Philibert Tsiranana. Tsiranana had been only a figurehead since last May when stu- dent and labor demonstrators forced him to turn real power over to Ramanantsoa.' In the campaign leading up to the referen- dum the government took the line that an affirm- ative vote was a vote against Tsiranana, who is very unpopular.: Ramanantsoa, nevertheless, has won considerable acceptance throughout the island and would probably have received a strong vote of confidence even if Tsiranana had not been an issue. The general has worked diligently to prevent conflict between Madagascar's major tribal groups, has tried to end corruption and improve government administration, has begun to move Malagasy citizens into positions held by French advisers, and is endeavoring to give his country a less French and more nationalist orientation in foreign policy.) Many problems remain not the least of which is the country's sagging economy. Ramanantsoa has not yet offered a precise eco- nomic program. The general is committed to changing the country's political institutions; to do this, he will have to bargain for support among the island's diverse interest groups. Many of the major political figures who supported Ramanantsoa in the referendum will probably differ with the government over the pace and direction of political and economic reform. Ramanantsoa must also contend with the students and workers who brought him to power. The government has not yet responded to de- mands made by students and workers at a na- tional congress in September. Many of these demands are too radical for the government to accept, and Ramanantsoa's strong showing in the referendum should strengthen his hand in re- sisting them. ARGENTINA: PERON'S INITIATIVE The Peronists and the military leaders have laid the foundation for serious negotiations on the coming elections and the government that will follow. Former dictator Juan Peron has offered a 10-point "reconstruction plan" that has elicited a favorable response from the Lanusse government- Peron's personal representative has stated that if an agreement can be reached, Peron will return to Argentina to sign it. Several points in the Peronist document deal with issues on which there is already agreement or only a minor difference of opinion between the Peronists and the government. The points of agreement include the strengthening of national sovereignty, changes in economic and social policy, and lifting of the state of siege. The plan also includes many controversial issues, but even the points on which there is strong difference are couched in conciliatory terms. SECRET 20 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 u- StLI-{t 25X1 President Lanusse has publicly characterized PERON'S TEN POINTS 1. Immediate severance of all international ties that limit national sovereignty. 2. Urgent modification of economic/social policy. 3. Program for national reconstruction under the national economic and social council. 4. Precise definition of the future participa- tion of the armed forces in national planning and reconstruction. 5. Re-examination of the constitutional amendments controlling "institutiona- lization." 6. All decisions on amnesties, abrogations, extraordinary laws to be the responsibility of the future government. 7. Designation of a senior military officer as minister of interior. 8. Formation of a commission to ensure the impartiality of the public media. 9. Lifting of the state of siege and liberty for all political prisoners. 10. Consultation and agreement with all po- litical forces regarding the establishment of the electoral law and convocation of elec- tions. the 10-point plan as a " ositive contribution to reaching a solution." The pla in Lanusse's view, re lects Peron's effort to reach an accord with the govern- ment and avoid losing control of the Peronist movement, which would result if he tried to re- main aloof from the elections. j There are some points in Peron's plan that are clearly not negotiable from the government's point of view, such as the demand that all "polit- ical prisoners" should be released and that the law barring Peron's candidacy because he was not in the country on 25 August should be abrogated. Even so, Lanusse will probably try to be as forth- coming as he can; ;The resignation of Finance Minister Licciardo could be one indication of a willingness to cooperate. The Peronist plan called for a loosening of controls on wages and credit and a tightening of controls on foreign business. The acceptance of Licciardo's resignation could mean that Lanusse is ready to move in this di- rection. /The willingness of the Peronists and the gov- ernment to open a dialogue is encouraging, but it is unlikely that an accord will be easily reached. The military and the Peronists have been unable to reconcile their differences in the 17 years since Peron was overthrown, and there are deep dif- ferenc and lon -held suspicions to be over- come. SECRET Page 21 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SEC;HET CHILE: ALLENDE AFLOAT +.. As the Allende government moves from one difficulty to another, it manages to retrieve enough chestnuts from the fires to stay viable. It manages to keep its opponents off base and to grasp the important levers of economic control more firmly in its own hands. The two chief assets in this process are Allende's own ability to feel his way through the Chilean political labyrinth and the Communist Party's steady con- solidation of its role as the key party in the government. The Kennecott attachment of payment for a shipment of Chilean copper to France has serious implications for a country in deep economic dis- tress, but Allende's opposition has no choice but to rally behind him on this nationalistic issue. Indeed, he frequently finds the means to blunt the opposition's campaign to demonstrate that his coalition is governing Chile badly. Allende blurred even the official admission this week that this year the inflation rate had soared to 99.8 percent by 1 October. He told the Chileans that they must solve the country's difficulties by their own hard work and self-denial and then raised wages to equal the price increases. While the response to his urging is unlikely to be noticeable and opposi- tion demonstrations continue to be impressive, a majority of Chileans still seem to consider Al- lende no worse than many of his predecessors. At the same time, the President is drawing the armed forces into stronger identification with his administration. He announced on 7 October that the service commanders have developed a plan to integrate the military more fully into the country's economic development programs. In fact, he has cultivated the armed forces so as- siduously that one magazine calls them Chile's pampered children. Allende's task is wearing and he often be- trays strain and impatience. His satisfaction in his office is, however, a strong restorative. Such ex- periences as receiving Angela Davis as well as the Joliot-Curie medal at the World Peace Conference in Santiago and playing the underdog in the Kennecott and other widely publicized issues seem to offset his failures and keep him going. Meanwhile, the Communist Party daily ac- curately gauges the situation and seldom misses an opening. Party leaders keep their perspective and are wary of setting off a reaction by ap- pearing to have too much power. They see to it that their government responsibilities are for the most part efficiently handled and that political resentment of the party inside and outside the coalition is kept to reasonable proportions. The party knows that it is Allende's most reliable 25X1 political support and takes particular satisfaction in his ability to keep the military from co- operating to unseat the government. SECRET Page 22 WEEKLY SUMMARY 13 Oct 72 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 . SECRET vestors. The petroleum issue is a highly charged ),-one, and the foreign companies have been ex- ' tremely cautious in setting out their negotiating positions so as to keep charges of economic imperialism to a minimum.; Several of the major oil companies currently LThe government has placed high-perhaps engaged in exploiting Ecuador's Oriente oil fields unrealistic-hopes on the revenues from the ex- are so disillusioned over the prospects for locating port of crude oil and will be hard pressed to `and developing large reserves and for gaining -justify a significant drop in production or ex- profitable concession terms that they are thinking pectations. Already, national newspapers have ,r- of pulling out of the country. If they do, it will begun cautiously criticizing the government for have a major impact on the military regime.] ..) pursuing an unwise policy toward foreign in- In September, AMOCO relinquished the rights to one of its concessions and will probably do the same with the other. The company has drilled two wells so far and both have been dry. The Anglo consortium has decided in effect to i suspend drilling after the completion of its eighth well; only one of its first seven brought up a significant amount of oil.." .Of the remaining 24 foreign companies, only Texaco-Gulf has thus far agreed to pay the re- cently announced higher rental rates. Texaco-Gulf is the largest single investor in Ecuador, having invested over $300 million so far, including $154 million for the construction of a trans-Andean pipeline; it is the only company that has actually shipped crude oil out of the country. Texaco-Gulf began shipping crude oil on 15 August and ship- ments have now reached 200,000 barrels per day; this figure should reach 250,000 by the end of the year. According to the present contract, Texaco-Gulf will keep 25 percent of the profits and give the government 75 percent. ,Current negotiations between the oil com- panies and the government stem from the govern- ment's decision last June to apply retroactively the highly restrictive Hydrocarbons Law of October 1971 to existing contracts. The com- panies view this unilateral move as unfair, and in some cases, as precluding profitable operations. Protests have been futile, but the government may have to reconsider if more companies suspend operations as a result of unfavorable ex- ploratory drilling._'j Texaco-Gulf Keeping at It Many of the foreign investors have reached the point where they must make critical decisions on further investments. Their deliberations have been complicated by the injection of higher rental rates and the possibility that recoverable oil re- serves are significantly lower than the six billion barrels previously estimated. Texaco-Gulf has already invested so heavily that refusing to pay the higher rates and relinquishing its concessions would be economically unjustifiable. For the other companies, it is a question of continuing to operate in a high risk environment or cutting their 25X1 losses by getting out now. Their decisions will be a major factor in determining the military gov- ernment's direction and longevity. SECRET Page 23 WEEKLY SUMMARY Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Secret Secret Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 -wool Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Special Report Yugoslavia: The Politics of Succession Secret N2 49 13 October 1972 No. 0391/72A Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28 CIA-RDP79-00927A009800060001-0 Yugoslavia: The Politics I Succession SECRET Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET The succession in Yugoslavia will not be easy. The problems of a developing nation bal- anced between East and West and plagued with ethnic hatreds will compound the difficulties when President Tito passes from the scene. With an eye toward helping his countrymen surmount these obstacles, Tito has created a system of col- lective leadership in both the party and state. A hybrid mixture of Western liberalism and Com- munism, this system is anathema to the Soviets, an enigma to the West, and not really understood by all the Yugoslavs. In fleshing out Tito's blueprint for gov- erning, Yugoslavia has suffered challenges and set- backs, notably the bout with Croatian nation- alism last year. With each challenge to date the system seems to have matured and gained resili- ence. In the background stands the military officer corps, which considers itself the guardian of the unity of Yugoslavia. The armed forces have repeatedly expressed a willingness to step in should the federation's existence be endangered and will be ready to do so in the succession period. As a result of years of carefully planned personnel shifts, a large number of well-trained leaders with broad experience are available when Tito leaves. In spite of personality conflicts, animosities, and disagreements, most of them recognize that their home republics and provinces have no future outside the federation. On bal- ance, they probably can be expected, even after Tito's steadying hand is removed, to pull together and prove that Yugoslavia is not just the impos- sible dream of an aging dictator. Tito and His System Tito has sought to build a nation-state where only a facade existed before and to ensure that the Yugoslavia he has built continues after him. The postwar record of accomplishments is impres- sive. Tito, in addition to defying Stalin, parlayed ambiguous terms such as "self-management" and "nonalignment" into political concepts that worked, for a while at least. Special Report A crafty and gregarious self-made man, Tito possesses rare political talents and skills. He is dogmatic and can be arrogant, but Tito has keen instinct for sensing danger, knows when self- control is needed and, no less important, how to neutralize his opposition. Most significant for Yugoslavia's future, however, is his masterful ability to employ the skills of those around him. Critics of the aging leader and his system argue that Yugoslavia is just a castle in the air that will be there only so long as he is around. Recog- nizing the problems that lie ahead, Tito has con- scientiously sought to lay a solid foundation for his nation's future. He has created collective executive bodies in both the party and govern- ment in which genuine debate and give-and-take have become part of the decision-making process. Aware that collective governing bodies are only as good as the men who occupy them, Tito has instituted a system of rotating all major party and government assignments at two- to three-year intervals. This accomplishes two things: it pre- vents a potential political rival from emerging to challenge Tito's power and authority, and it brings the nation's most talented leaders to Belgrade from the republics and provinces for the benefit of the federation. The net result is that Yugoslavia has a reser- voir of well-trained men prepared to take over and operate the system Tito passes to them. Most of these men are equally adroit in handling party and state affairs. Many have held diplomatic posts in the East and West. The Party The real crunch in the succession period will, of course, come in the party. It is the party that will determine how power is divided up and exercised after Tito. In 1969, Tito created a party executive bureau, designed to bring together in Belgrade the best talent available from the center and from each republic and province. It was also designed to give an equal voice to Yugoslavia's various ethnic groups at the highest decision- making level. - 2 - 13 October 1972 SECRET Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET Executive and Legislative Branches of Yugoslavia Chamber of Nationalities (140 members) Social-Political Chamber (120 members) Social Welfare and Health Chamber (120 members) FEDERAL EXECUTIVE COUNCIL (FEC) The Cabinet PREMIER Education and Culture Chamber (120 members) Economic Chamber (120 members) 553668 l g-72 pecial Report VICE PREMIER VICE PREMIER SECRETARY Federal Secretaries for: (1) Economy (2) Labor and Social Policies (3) Finance (4) Foreign Trade (5) Foreign Affairs (6) National Defense (7) Judicial and General Administration (8) Agriculture (9) Internal Affairs (10) Transportation and Communications (28 members in all) SECRET Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 ~Mm Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 SECRET In three turbulent years, the executive bureau has undergone extensive reorganization. Today, it is the collective body responsible for taking much of the party work off Tito's shoulders; eventually, it is expected to provide the Yugoslav leadership in the succession period. Today, the bureau is made up of eight men, one from each of the six republics and one from each of the two autonomous provinces. The average age of its members is 50.6 years; four of them are lawyers or economists, one is a teacher, one a veterinarian, one a philosopher and one has a background in political science. They bring together a wide range of experience and expertise. Fadil Hodza, for example, is a specialist in Alba- nian affairs. He is trusted and well liked by the vast majority of Yugoslavia's nearly one million Albanians. Kiro Gligorov is the official spokesman for the nation's complicated economic reform. On present form the person most likely to take up Tito's party mantle is the young and energetic Stane Dolanc. A Slovenian, Dolanc has both organizational and ideological competence. He is one of the original executive bureau mem- bers and has gained Tito's confidence not only through hard work and devotion to the party, but also through his ability to tailor party action quickly to Tito's wishes. On numerous occasions Dolanc has spoken for Tito. Last December, for example, Dolanc went on nationwide TV to explain the actions taken against the Croatian leadership. He remained in the forefront through- out the turbulence of December and January, translating Tito's words into action. Dolanc's critics call him a hatchet man. Friends respond that he genuinely believes in the need for a strong party capable of holding Yugoslavia together. He does not, as some critics imply, advocate a return to Soviet-style centralist rule. Like many of his fellow Slovenes, Dolanc is greatly concerned that the centrifugal forces of regionalism endanger the federation. Edvard Kardelj, the party's intellectual is not likely to succeed Tito, but will wield considerable influence on the next party chief. He is the last of Tito's close, wartime colleagues to remain in prominence. Kardelj is the father of the nation's Special Report peculiar form of socialism, the guiding light behind Belgrade's nonaligned posture, and the chief architect of Yugoslavia's current decentral- izing constitutional reforms. Two years ago Tito astonished the faithful in Zagreb with a call for a collective presidency. Speaking with candor, Tito said the time was ripe to prepare for the succession. "There should be a collective president in Yugoslavia which bears full responsibility for what is happening," he said. "This is the only solution to preserve our unity." Presidium 52 Members Executive Bureau 8 Members Under Tito's new scheme, others should begin to lift the burden of leadership from him, teamwork and cooperation would be the rule, Yugoslavia's diverse nationalities would be equal, no one group would dominate another. In this manner Tito set in motion a radical reform designed to qive all the republics and provinces a SECRET - Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 sense of equal participation in the highest levels of government. Tito's collective presidency is modeled after the Swiss. Twenty-three men make up the col- lective presidency-himself, three representatives from each of the country's six republics, and two from each of the two autonomous provinces. Each member of the presidency is charged with representing his local interests and, in addition, helps run the government. With the creation of the collective presi- dency, the position of vice president was estab- lished. The post is significant because the incum- bent automatically becomes caretaker president 1971-72 Krste Crvenkovski, a Macedonian 1972-73 Rato Dugonjic, a Serb from Bosnia-Hercegovina 1973-74 A Slovene 1974-75 A Serb 1975-76 A Croat 1976-77 A Montenegrin 1977-78 A Vojvodinian The rotation will start over in 1978 and an Albanian will not hold down the post until 1985. Presumably, once Tito is gone the titular post of president will rotate in a similar fashion. when Tito departs. The vice presidency rotates annually among the presidency's members ac- cording to a predetermined pattern. First to be vice president was a Macedonian, Krste Crvenkov- ski, who served from August 1971 to August 1972. He is well educated, aggressive, and intel- ligent, and, during his tour as vice president, clearly established himself as one who will play a key role in the succession period. Were Tito to die this year, the caretaker president would be the current vice president, Rato Dugonjic, a Serb from Bosnia-Hercegovina. Dugonjic has experi- ence in internal and foreign affairs as well as in youth work, an area of prime concern for the regime. Another feature of Tito's new system of governance, Yugoslav leaders are expected to substitute persuasion for coercion and to be practical instead of pedantic. They must be articulate, playing to their audiences and main- taining a good public image. Ideology must not stand in the way of getting the job done. They must be politicians more akin to those in the West than in the East. Foreign Minister Mirko Tepavac, Finance Minister Janko Smole and Vice Premier Anton Vratusa are examples of the new breed. They will play important roles in running Yugoslavia after Tito. The first two are exceptions to the rotation policy and are serving their second consecutive terms in office. They have gained respect both at home and abroad. Of the three, the most ambitious is Vratusa. An outspoken supporter of Yugoslavia's self- managing socialism and nonaligned foreign policy, the sheer force of his personality assures him a role in the post-Tito politicking. Smole, a former deputy director of the International Bank for Reconstruction and Development, is well known and liked in international financial circles. His arrogance in dealing with fellow Yugoslavs, how- ever, could prove his undoing in the politics of succession. Tepavac is probably the most liberal of the three. His sometimes unorthodox ideas are reinforced at home by his actress wife Renata. She is a far cry from the Mrs. Khrushchev stereo- type of a Communist leader's wife. This beauty is a theater buff and has lent her name and talents to Belgrade's avant garde theater, Atelje 212. Her poise and charm have been a major asset to Tepavac on his way up. Although not in the limelight at present, Mijalko Todorovic promises to figure prominantly in the succession period. He has been shuffled off to the unpromising job of president, but as a long-time confidant of Tito's, will very likely be back. He captured headlines four years ago with his virulent criticism of the Soviets for occupying Czechoslovakia. SECRET Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET Yugoslavia's leaders may range from liberal to conservative, but they are united in a belief that the nation's future depends on federation. Nowhere is the federalist feeling stronger than in the military. The armed forces have long been faithful supporters of Tito and his policies. The officer corps has come to view itself as holding a privileged position in the power structure. They were confirmed in this belief last December when Tito sought and obtained endorsement for his move to put down Croatian separatism. The Zagreb military commander was among the first to come out in support of Tito's actions. No military leader has been more outspoken in opposition to localism and support of federalism than Colonel General Viktor Bubanj, who is clearly going places in the armed forces. He is well versed in political and economic affairs, and an aggressive, natural leader. He has been chief of staff since January 1970. In this capacity he frequently sees Western cl l omats. Defense Minister Nikola Ljubicic is another military figure who will have a voice in what happens after Tito. He is articulate, and Tito has used him more than once, both at home and abroad, to propagate and defend national policies. Ljubicic is intensely loyal to the federation and would support the politician he felt best able to hold Yugoslavia together. A third military figure whose voice will be heard in the succession period is Colonel General Ivan Miskovic. He has Tito's ear, indeed, he was made special adviser to the President on questions of security in the wake of the Croatian political upheavals. Miskovic's posi- tion is strengthened by the fact that his brother Milan is a member of the state presidency. F_ Some who have met Miskovic describe him as pro-Soviet. A better description would be that he is politically conservative and harbors strong reservations about the value of, and need for, decentralizing power. His views on running a Communist state are closer to Moscow's than are those of his colleagues, but this should not be over-emphasized. Economic rivalries, ethnic animosities and foreign meddling plague Yugoslavia now and will continue to do so in the succession period. The path of Yugoslavia's recent history is paved with economic problems. The widening gulf between a relatively affluent urban society on the one hand and an agricultural population on the other is a constant irritant. The gap be- tween the relatively well-developed north and 25X1 west and the depressed south and east, is another 25X1 critical problem. This regional disparity is a major source of rivalry, distrust and envy. It feeds the nation's ancient and bitter ethnic animosities. Belgrade has worked hard on overcoming this problem, but it is still there. The government now admits its program of channeling investment funds to backward areas will require a consider- able gestation period before it produces results. Regional squabbling will afflict Yugoslavia as long as these economic disparities exist. The problem will not be solved in Tito's lifetime and will be a25X1 major concern to those who follow him. No nation in Europe is more plagued with deep-rooted ethnic hatreds than is Yugoslavia. Tito's leadership and the sheer force of his pres- tige and personality kept the problem at bay throughout most of the postwar period. Al- though designed in part to ameliorate these animosities, the freer political climate accom- panying Tito's efforts to build for the future has permitted them to be expressed more openly and vigorously. As a result, frictions have increased instead of declined. The latest and most serious example was the political upheaval in Croatia. It showed that, after 2/ years in power, Vito had not managed to build a federation in which con- stituent ethnic groups put aside regional differ- ences in the interest of the nation as a whole. The magnitude of the move against the Croatian leaders last December left many Yugo- slavs bewildered and stunned. More than 600 Croats lost their jobs at that time, and many feared Vito's new system had been endangered by Tito's own actions. Confusion within party ranks was heightened by Tnto's vacillating and then by SECRET Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 VIM# JtUKt I his highhanded circumvention of the system he had built, as well as his failure to lay out clear-cut party directives. In the wake of Croatia, Belgrade has moved against regional chauvinists throughout Yugo- slavia. This summer witnessed trials not only in Croatia, but in Serbia and Macedonia as well. The party executive bureau announced in mid- September that measures to ensure discipline will henceforth include sending "teams" to local republic, provincial, and army party units. A great deal more needs to be done. Time is needed to correct past mistakes and to heal the wounds of the Croatian crisis last year. Time is one thing Tito does not have. He is 80. There is no easy or quick solution to the complex problem of regionalism, and it is not likely to be solved within the aging leader's remaining years. Tito has brought to the fore leaders who recognize the need for a federation of equal nationalities, but the mammoth task of instilling this idea in the average Croat or Serb still remains to be done. It will take all the skill and cunning that can be mustered to guide Yugoslavia through this wilder- ness that Tito scarcely penetrated. Tito's successors will be subjected to machinations from a number of foreign sources, principally the USSR. The Soviets have learned to live with, even grudgingly accept, the Yugoslav heresy. Moscow hopes that Yugoslavia's march toward orthodox Soviet-style Communism will be resumed after the heretic Tito leaves. Moscow may even anticipate that Tito's hard-pressed heirs will turn to the Soviet Union for advice and help in dealing with the serious economic difficulties and nationality rivalries. The Soviets have at least temporarily patched up their differences with Tito and are using this opening to jockey for a better position in the post-Tito Yugoslavia. In return for large development credits Moscow re- cently joined the West in gaining the right to bypass federal authorities and deal directly with local enterprises. Over the long run, these foot- holds may prove very useful in insinuating Mos- cow's views and positions into Yugoslavia. Special Report - 7 SECRET Radical, anti-Communist Croatian emigres have taken heart from Yugoslavia's recent prob- lems with nationalism and have intensified their campaign for an independent Croatia through guerrilla warfare, propaganda, and air piracy. These actions are part of a pattern of the upsurge in terrorism that began in 1971 with the murder of the Yugoslav ambassador to Sweden, Vladimer Rolovic, and terrorism will continue into the succession period. Croatian emigres are based in Austria, Sweden, Canada, West Germany, the US, and Australia. Belgrade has made it clear that failure of these host countries to clamp down on the emigres will have a negative affect on bilateral relations. The problem may become an even greater irritant in the succession period than it is today because the emi res will see Tito's passing as a green light. Josip Broz Tito, described by some as the first and last Yugoslav. Tito kicked off the politics of succession by calling for the creation of a collective presidency and for a further decentralization of power from Belgrade to the republics and provinces. One con- stitutional reform has been passed and a second is 13 October 1972 Approved For Release 2008/04/28: CIA-RDP79-00927A009800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 SECRET being debated. Regionalism last winter presented Tito with his most serious internal threat since the conclusion of World War 11. It was a dramatic, if not traumatic, period for the Yugoslavs. From it, however, a better picture of the succession emerged. When Tito goes, collective leadership will be accepted. Leadership of the government will pass to the vice president who will become caretaker head of state. The presidency is then supposed to rotate on an annual basis along predetermined lines. In the shakedown period it may well do so. In the party, the succession is less clear but proba- bly will be fought out in the executive bureau. The best bet is that the bureau's secretary will be Tito's heir. Tito is banking heavily on the common fear of foreign meddling, and on the accepted wisdom that Yugoslavia's constituent republics and provinces cannot go it alone, to draw the nation's talented leaders together for the common good. Yugoslavs often fight bitterly among themselves, but there is a genuine pride in the nation's post- Special Report war accomplishments. Nothing unites them as quickly as the threat of foreign intervention. Collective executive bodies, troikas and councils of state have not historically proven durable. For the short run, however, that is what appears in store for Yugoslavia. At this time no politician has the prestige or backing to fill Tito's shoes. Barring the unexpected, however, the chances are good that the federation probably will hold together after Tito's passing, difficult as that will be, and that Tito's system will function well enough to keep Belgrade's nonaligned, self- managing system afloat in the immediate succes- sion period. The real test will come several years after Tito is gone. Then, heightened frictions among the regions or increased foreign meddling could bring about an informal alliance between conservative leaders and the military to produce a more tightly controlled, centralized Communist state. Then, more than likely, some individual will emerge to dominate the system. SECRET Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0 Secret`w -"No, Secret Approved For Release 2008/04/28: CIA-RDP79-00927AO09800060001-0