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December 21, 2016
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November 14, 2007
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April 13, 1973
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Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Iq Next 2 Page(s) In Document Denied State Dept. review completed DIA review(s) completed. NAVY review completed. Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 DIRECTORATE OF INTELLIGENCE S~cret WEEKLY SUMMARY DOS, DIA, NAVY reviews completed Secret 13 April 1973 No. 0365/73 Copy N2 so Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 iopments of the week through noon on Thursday. EE.KL,Y SUMMARY, issued every Friday morning by of Economic Research, the Office of Strategic +on;s:ents. 25X1 1, and We Directorate of Science and Technology. aed separately as Special Reports are listed in the CONTENTS (13Aprit'1973) I China: A Certain Distance 2 Argentina: Terrorist Challenge 2 Arabs-Israel: Trouncing the Fedayeen n Cambodia: Sihanouk Resurfaces t, Vietnam 6 Laos MIDDLE EAST AFRICA France: The New Team Malta: In the Web Denmark: Back to Work USSR: East and West USSR: Soviet Navy Stirring Yugoslavia: Defense Doctrine Recast Bulgaria: Room at the Top International Money Doing Business With Romania Italy: The Fragile Margin 17 Sikkim: Political Upheaval 18 Kuwait-Iraq: Stalemate 18 Rhodesia: Groping 20 South Asia: Faint Hopes 20 Pakistan: New Constitution 21 Turkey: Finally a President 21 Cyprus: Makarios vs Grivas WESTERN HEMISPHERE 22 Panama: Vox Populi 22 Chile: A Truce 23 Venezuela: Energy Resources 24 Peru: Moderates on the Move f Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 A CERTAIN DISTANCE Chinese economic and political u continue. The current s Si m r no-Vietna ese m litary aid pact almost certainly runs through the end of 1973, and there are signs that aid under this pact istheconautintuumingn.~illtand should be up for renegotiation in , further hints about Peking's course almost certainly should be available before then. ) 1f [There are other signs that Peking is rethink- ing the military aid question. Sihanouk recently claimed that Chou En-Iai had declared that no new Chinese military assistance to the Khmer insurgents will ho A reement flatly h?k,.k:* "II n9 because the Pari JA "commentato r article in the party daily of 7 April-the first article since early January to use this authoritative by-tine-charged that the US was using its Power "to negotiate with an inten- tion of dividing and provoking the socialist coun- tries." This formulation, with its implicit criticism of Chinese and Soviet attitudes toward big-power detente, has not appeared in the North Vietnam- ese media since last August when Hanoi was under heavy pressure from its big patrons to be forthcoming at the Paris talks.] 1 1In any approaches to the North Vietnamese do this matter Chines , e attitudes would con- ditioned by their ap rai l b p sa of prospects or So iet mili tar aid to Hanoi and US sup ort for Sal- SECRET Chou En-lai [Public and private Chinese statements since the cease-fire in Vietnam underline Peking's desire to see it removed as a major issue in big-power Politics. Not only are the Chinese taking a relaxed and positive attitude toward the situation, but they may lso be using their influence with Hanoi to this end? Page 1 WEEKLY SUMMARv , o Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET \The army and police forces have launched a counter-offensive against the radical leftists who have terrorized Argentina with a rash of bomb- ings, murders, and kidnapings in the past few weeks. The Peronists, who are still trying to pla- cate the terrorists with the promise of amnesty for political prisoners, are be inning to doubt that they will have much success [The security forces arrested several sus- pected terrorists and confiscated arms and subver- sive propaganda in a series of raids and searches of homes and automobiles beginning on 10 April. They failed, however, to turn up any of the so-called "people's prisons," where at least 25 kidnap victims so far this year have been held for periods ranging from a few days to several weeks. \T--wo recent kidnap victims-a retired Argen- tine admiral and a British businessman-are still being held. Earlier this week a US business execu- tive was released from ca tivit ment and have claimed that it would cease if they won the election. In public, President-elect Campora has continued to take a conciliatory line in the apparent hope that terrorists will lay down their arms in exchange for amnesty. He has called on the terrorists to observe a "truce" to let him prove that he "is on the right path."] If the terrorism continues, the most likely effect will be to make the Peronists more depen- dent on the military and thereby strengthen the hand of armed forces leaders in the next govern- ment. Working togetherl the Peronists and the military might be quite effective against the vari- ous terrorist organizations. In their years out of power, the Peronists have occasionally worked with and claim to have penetrated most of the The violence is finally beginning to worry the Peronists. They have long blamed terrorism on the repressive tactics of the military govern- Page 2 currently active organizations. Arabs-Israel TROUNCING THE FEDAYEEN !0 In the early morning of 10 April an Israeli para-commando company carried out a three- hour operation against the fedayeen in Lebanon, hitting seven targets in Beirut itself and one in Sidon. This time the Israelis sought out and killed three top fedayeen leaders. In addition, the Is- raelis blew up an apartment belonging to the SECRET WEEKLY SUMMARY 13 Apr 73 25X1 25X1 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET 'we Popular Democratic Front for the Liberation of Palestine. They attacked two weapons workshops, the reputed headquarters for Fatah operations in the Gaza Strip, and a vehicle repair shop at Sidon. As was the case in the raid against seven guerrilla targets north of Tripoli, Lebanon, on 20 Feb- ruary, the commandos were transported by patrol the fedayeen have no alternative. Nevertheless, the raid must have had a chilling effect on feda- yeen morale, and restrictions imposed by Leba- non and Syria have severely limited their capa- bility to strike directly at the Israelis in cross- border operations.. boats and put ashore and brought out in rubber dinghies; helicopters were used to evacuate the 13 SFor the moment, Fatah leader Yasir Arafat casualties.) is trying to exploit sympathy for the fedayeen 1-k dead.IAAs part of this effort, the fedayeen com- 1' /The deputy chief of Israeli military intelli- mand charged that the US collaborated with the gence, Brigadier General Shalev, said that the Israelis in staging the strike and that the US strike was "part of Israel's policy of hitting those Embassy in Beirut is harboring members of the responsible for international terrorism." He said I Israeli assault team.J)'Several mass protests against the raid was not in direct response to the feda- the US were organizedyand there were threats of yeen attempts against the Israeli ambassador and fedayeen terrorist action against the US Embassy the El Al aircraft in Cyprus and obviously had itself.j been planned much earlier / f JChief of Staff Lieutenant General Elazar un- derscored the Israeli view that most terrorist plots are hatched in Lebanon, where terrorists have "complete freedom.'j(Since the slayings of one Belgian and two American diplomats in Khar- toum on 2 March, Palestine guerrillas have killed an Israeli leather merchant in Nicosia who they claimed was an Israeli spy. There have also been a growing number of fedayeen-inspired incidents on the Israeli-Lebanon border, including one in which two Arabs and one Druse on a hunting party were killed by a mine. There has also been an increase in guerrilla activity in the Gaza Strip, and several explosions in Israel itself. The sub- sequent arrests of a number of guerrilla suspects in the occupied west bank indicate the raid was successful in its intelligence gathering aspects] The Lebanese Government has been shaken severely. Prime Minister Salam submitted his resignation, apparently because President Fran- jiyah would not agree to dismiss the army commander for what Salam regarded as negli- gence. Salam seems to want to dissociate himself from the government and to preserve his standing with the Muslim community. His resignation has not yet been accepted, but Franjiyah is said to be considering the formation of a government of "national union," presumably including more leftist, pro-Palestinian sympathizers.' commenting on the fedayeen actions in Nicosia, has publicly warned the Arabs and Israelis not to extend their conflict to Cyprus. Criminal charges have been brought against the terr rists, but it is (,~ not clear whether they will be tried(rhe organiza- iThe precision of the Israeli action in Leba- tional affiliation of the terrorists as not been non stunned the Palestinians. When the fedayeen leaders re er, they will turn to the problem of Zretaliation (The deaths of three senior Fatah offi- cials, inclu ing a leading Black September figure and the destruction of installations, are not crip- pling losses. As with previous Israeli raids, the one this week will not affect the guerrillas' commit- ment to international terrorism. As they see it, SECRET Paqe 3 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET After being out of the public eye for almost two months, Prince Sihanouk is back in his favor- ite position-the limelight. The former Cam- bodian leader reappeared in Hanoi late last week professing to have just returned from an extensive tour of the "liberated zone" in Cambodia. The attention that Sihanouk received in the North Vietnamese capital, including strong support for his claim as Cambodia's "legitimate" chief of state, is the clearest indication to date that Hanoi is willing to endorse Sihanouk's return to a posi- tion of power in his homeland. jT [.The North Vietnamese apparently calculate that the deteriorating situation inside Cambodia improves the chances that negotiations with Sihanouk will eventually prove acceptable to Phnom Penh. Even if such negotiations prove impossible, the new emphasis helps convey an impression of Khmer Communist unity and legiti- macy.) Sihanouk contends that he now enjoys the unreserved allegiance of the Khmer Communists in Cambodia and is entitled to speak and act for them. He lost little time in assuming this role, asserting that the indigenous Communists had asked him to tell the world that they would never accept any settlement or cease-fire with the Lon Nol government. Sihanouk indicated that his trip had reduced political frictions within the anti- government forces via a "marriage" of non- Communist and Communist factions. He made it clear, however, that he expects the Communists to dominate any future government in Cambodia. \On the military side, Sihanouk stressed that his "army" is an "independent" force, now total- ing 120,000 "effectives"-an obvious exaggera- tion. Despite this boasting, he played down the possibility of a direct assault on Phnom Penh, claiming that, because of US air support, it would be better to wait for the Lon Nol government to collapse of its own weight. Asserting that military deliveries from Peking were stopping, Sihanouk claimed that the Khmer Communists had already been given enough materiel to allow them to keep fighting until 1975.1 Nearly Out of Gas (Phnom Penh almost literally ran out of gas early in the week, but a major fuel emergency was avoided when four petroleum tankers braved Communist shellfire and moved up the Mekong from South Vietnam to the capital. They de- livered about a week's supply of gasoline and other POL products. The tankers were part of an 18-vessel resupply convoy. Four other ships from the convoy carried general cargo. The remaining nine, including five tankers, did not get through. One was sunk. If the remnants of the convoy are not able to run the Mekong gauntlet within a week, Phnom Penh's petroleum reserves will again be dangerously low.j The River and the Roads Most of the fire directed against the convoy came on the South Vietnam side of the border. On the Cambodian side, the security situation along the Mekong has improved. Government troops have regained control over sizable stretches of the river's banks north of Neak Luong. With the aid of air support, they have also cleared all but two sections of Route 1 between Phnom Penh and Neak Luong. In the southwest, the Cambodians reopened a section of Route 4 north of the port of Kompong Som on 9 April without meeting any resistance:] r j ,'The government's situation along Route 2 south of Phnom Penh has deteriorated. Khmer Communist units have kept up their harassment of Cambodian positions in the vicinity of Takeo, as well as their shellings of the isolated provincial capital. A few miles west of Takeo, the Com- munists pushed government forces out of the town of Angtassom-a serious setback which sub- stantially increases the threat to Takeo. Route 5, Phnom Penh's rice line to the northwest, remains closed between Oudong and Komponp Chh- nang. SECRET Page 4 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 StL;Kt I The ICCS Shootdown level since the cease-fire went into effect last ,j ?- January] (Shells are still falling on some govern- IThe ICCS contingent in South Vietnam suf- ment positions, however, especially in forward fered its first fatalities on 7 April, when one of its. bases near Viet Cong areas helicopters was shot down near Khe Sanh in thW Communist-held part of Quang Tri Province. The aircraft, one of two on a flight to a designated Communist resupply point, was hit by a small surface-to-air missile. All aboard-one Indonesian, one Canadian, two Hungarians, two Viet Cong, two Americans, and a Filipino-were killed.1 The helicopter was in an area the North Vietnamese are turning into a major military base. Regret has been expressed in Communist propa- ganda output I__.,- At the same time, the Communists have done their best to shift the blame for the incident to the ICCS. They tried to persuade the crew and passengers from the second Commission heli- copter, which landed safely a mile or so from where the first crashed, that both aircraft were far off course:jrCommunist media have taken up the same theme, charging that the aircraft was lost because its "US crewmen did not adhere to the established itinerary." T Actually, a Viet Cong v--'-.5official was navigating, and the pilots of the second helicopter sa they are sure the aircraft were right on course.) ,?; IICCS inspection efforts in Communist-con- trolled areas are sure to be inhibited, at least for a time, and those who question the value of the whole supervisory operation under the present cease-fire guidelines will become a bit more cyni- cal.f7Moreover, even though Communist members of ICCS local teams are angered by the Viet Cong's handling of the incident, they apparently will not be allowed to lean very hard on the Vietnamese Communists4 The Military Situation lin the northern provinces, ground fighting in some areas during the past week was at the lowest SECRET Page 5 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET -- iln the southern provinces, the Communists are maintaining their pressure on the isolated Tonle Cham ranger camp. The Communists have the capability to overrun Tonle Cham, but appar- ently hope to starve out the defenders, who have only a few days' supply of food and ammunition. Efforts to-arrange a truce in the area have borne no fruit. ]+,The South Vietnamese military com- mander in the region, General Minh, views the situation around the camp as a crucial test of ICCS effectiveness, and sees the ability, or in- ability, of the ICCS to investigate the fighting as setting a precedent.0Another possible test of ICCS effectiveness could be shaping up near the pro- vincial capital of Phuoc Long northeast of Tonle Cham, where Minh believes the threat of a new Communist assault is "very serious."j of defense, and finance; the portfolios for public works, foreign affairs, and information will go to the Communists. Bargaining continues over the interior ministry. Posts of lesser importance will be divided evenly between the two sides. Vien- tiane will appoint the number-two man in each ministry headed by a Communist, and the Com- munists have the same right in reQand to the ministries headed by the government. ) (Despite the progress on political issues, formidable obstacles remain. The Communists are maintaining a hard line on military matters, and this could block the formation of a new gov- ernment for some time)TSpecifically, the Commu- .nists demand a formal demarcation of the zones of control, a prohibition on the integration of irregulars into the Lao Army, the dismantling of irregular bases such as Long Tieng, the abandon- ment of enclaves such as Bouam Long, and a severely circumscribed role for both the Lao There have been sharp skirmishes in several . ?Commissionj (The Communists almost certainly delta provinces at points close to Communist base intend to give way on some of these demands as areas or entry points. Dinh Tuong Province has the talks progress, but at the moment they are had considerable fighting, and the Communists showing no signs of yielding. have managed to scare much of the population out of the western delta town of Hong Ngu-an ICCS border entry checkpoint. Some of the fight- ing is intended to divert government attention from the infiltration of supplies and men, but much of it suggests that the Communists are bent on eliminating remaining South Vietnamese troops in these areas. LAOS: PASSING OUT PORTFOLIOS )Although the two sides remain far apart on many issues, Communist and government nego- tiators this week reached tentative agreement on the make-up of a new coalition cabinet. Under the agreement, Vientiane will retain the ministries Long Tieng Area SECRET Page 6 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 25X1 25X1 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET ;Pyongyang has always hoped that its dia- logue with Seoul would lead to the termination of the UN's role in Korea and an acceleration of US military withdrawal. Seoul, however, not only retains UN support but has recently received strong reassurances of continued US backing. Frustrated by these developments, Pyongyang is appealing directly to foreign governments in an effort to stir greater support for its position ;Its message is an old one, with some new twists. Speaking before the Supreme People's Assembly on 6 April, Premier Kim 11-song decried the presence of US forces as the major obstacle to progress in the North-South talks.j',He said that Pyongyang was ready to reduce its armed forces by 200,000 men if the US withdrew its 40,000 troops. This was a departure from Pyongyang's previous proposals which have tied any reduction in its forces to cutbacks in the larger South Korean forcesij Kim called for the abolition of the UN Command and the United Nations Commis- sion on the Unification and Rehabilitation of Korea and insisted that North Korea be allowed to attend the discussion of the Korean situation at the UN General Assembly this fall. These themes were repeated in letters sent to various governments. One addressed to the US Congress did not contain the specific offer to reduce forces; it did warn that the US presence and continuing military support for the South Koreans increased the possibility of conflict on the peninsula; The North Koreans probably realize that their offer of troop reductions will not be taken seriously, but, by appearing to be flexible in talks with the South, Pyongyang may hope to increase international support for its position. The North Koreans may believe that direct appeals to the US will complicate relations between Seoul and Washington..` More specifically, North Korea's campaign is designed to undercut Seoul's contention that there should be no consideration of the Korean issue at the UN this fall lest it jeopardize progress in the talks. Both in public speeches and in the private high-level talks with Seoul last month, the North Koreans have warned that there will be no progress in the talks until there is some agreement on military matters. In the absence of such prog- ress, Pyongyang and its allies can be expected to lobby strongly for consideration of the Korean SECRET Page 8 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 25X6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET The cabinet appointed on 5 April shows certain ,changes in President Pompidou's ap- proach, which reflect his stronger personal posi- tion after the legislative election last month. Over half of the 22 cabinet positions went to Gaullists; but for the first time in the Fifth Republic only one Gaullist "baron" figures in the government, and the exception is a close friend of the Pres- ident. Pompidou's own men hold the major posts. The new line-up does not foreshadow a sharp move away from the basic tenets of Gaullism to which Pompidou is committed. It does suggest that the President will be better able to react pragmatically to events than he could when orthodox Gaullists were stronger in the gov- ernment. (,Michel Jobert, formerly the head of the pres- idential staff, is the new foreign minister, replac- ing Maurice Schumann who lost his assembly seat in the election. Jobert is one of Pompidou's closest working associates and a foreign affairs specialist. Robert Galley, a technocrat and strong Gaullist replaces a hard-line Gaullist, Michel Debre, at the Defense Ministry.) The Independent Republicans, the Gaullists' major partner, increased their strength vis-a-vis the Gaullists in the election, but gained only one additional cabinet post. Giscard d'Estaing, their leader, retained the Ministry of Economics and Finance. Pompidou reportedly has suggested that the Gaullists and Independent Republicans be- come more unified and has singled out Giscard for special praise. Pompidou may be trying in this way to dilute arch-Gaullist influence, but the flat- tering attention given Giscard will raise specula- tion that an heir is being drawn forward.] ~A \The removal of Debre, along with some of the other cabinet changes, is aimed at convincing the voters that Pompidou is responsive to demands for change. Creation of a new ministry for administrative reform is another signal] IThe new government has announced plans for social reforms, including changes in the controversial draft law, increases in the minimum wage, and more flexibility in retirement programs. It has also proposed redrawing the boundaries of elec- tion districts and shortening the presidential term from seven to five years.} Arch-Gaullist Prime Minister Messmer was reappointed, though his tenure may be short. Messmer has served only since last July, and Pom- pidou may plan to retain him for several months as a face-saving device. Conspicuous by his ab- sence from the government is Jean Lecanuet, head of the centrist faction that cooperated with the government in the last round of the legislative race. Lecanuet declined Pompidou's offer of a post. Lecanuet may be waiting to see if Pompidou acts on reforms and may be watching to see if Messmer is replaced soon. He probably also wants to be free to regain control over the centrists who split with him over cooperation with the govern- ment. SECRET 25X1 25X1 Pane 10 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET `"' MALTA: IN THE WEB `) '!While Prime Minister Mintoff chips away at the complicated problem of NATO payments for the use of naval facilities in Malta, domestic prob- lems are piling up on the island. Unemployment is acute, inflation is zooming, and discontent has cropped up among the Labor government's reg- ular supporters. Mintoff's government has not really faced up to these serious problems.] complaints from the labor force, which custom- arily provides him solid support. In an effort to soothe disgruntled dry dock workers, Mintoff signed an agreement providing for pensions, a reduction of the work week, and a cost-of-living bonus. He refused to grant wage increases and insisted that economic sacrifice will be necessary; this is likely to irritate the impatient workers. 7 EOn the base payments issue, Mintoff, who - /An estimated 8.5 percent of the work force has never really sought to create an atmosphere of is unemployed. In an effort to reduce the ranks of cooperation, is caught by fluctuating exchange 4' the unemployed, Mintoff has established the rates. There are disagreements over the special' Pioneer Corps, a paramilitary unit that will con- payments provision of the base agreement by- centrate on public works projects. Measures such which NATO countries are compensating Malta as this and the concessions granted to port for losses caused by the sterling float last June. workers merely poke at the edges of the eco- These have been made worse by the dollar deval- f-7 nomic problems facing the island.Jtf the Maltese uation and the decision by other countries to economy is to recover, Mintoff must address him- float their currencies. He has been pressing for advance guarantees of exact amounts to be paid and assurances about the level of future payments for the duration of the agreement. He has not yet received them. (, )On the domestic front, Mintoff's public pronouncements of a rosy future created high expectations and have led to bitter disappoint- ment as promises fail to materialize. He is getting Empty Dry Dock self to inflation and to economic growth. Without a positive business climate to stimulate new investments an economic turnaround is unlikely to develops T [If he does not get the economy moving, his political future will be threatened. As disillusion- ment with Mintoff grows, the Labor Party is losing popularity. So far, the rival Nationalist Party, which suffers from disorganization and the absence of an articulate leader, has not been able to put together an effective challenge to Mint- DENMARK: BACK TO WORK 'r J~ [Workers and employers this week accepted a settlement to end a nationwide strike that had idled some 260,000 workers for nearly three weeks. The employers' federation ended by acqui- escing in an agreement similar to the one it re- jected earlier, apparently reasoning that it was better than a government-imposed settlement. I percent loss in production. 3 ' [Other European labor organizations had ,,pledged support to the Danish workers, and the /employers may have felt that further recalcitrance would only hurt Danish industry. The price for two years of labor peace was a 7.5-percent in- crease in wages and benefits and a reduction in man hours that may result in a two- to three- SECRET Page 11 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET [Moscow recently has picked up a few new endorsements of party chief Brezhnev's four- year-old proposal for "an Asian collective security system." In the communique issued at the end of Premier Kosygin's visit to Iran in mid-March, the Shah agreed to work for the realization of such a system. Subsequently, in an interview in Pravda, Japanese Foreign Minister Ohira said that Japan would be willing to exchange views with any country interested in the idea. The Soviets are using these statements in their own effort to enlist more Asian support for the concept, but they almost certainly realize that the idea will not become a reality soon.1 because the USSR is now publicly on record that the system is not aimed against China. i j jfhe Soviets are under no illusions that the recent endorsements will bring Brezhnev's scheme closer to fruition. A senior Foreign Ministry offi- cial this month noted some of the hurdles to be overcome first: a European security arrangement, a solution to the Arab-Israeli conflict, and nor- malization of relations between India, Pakistan, and Bangladesh. What has happened is that the Asian collective security system proposal is now firmly a part of Moscow's diplomatic effort to increase its acceptability in Asia. 1 lBrezhnev introduced the proposal in 1969 to President Podgorny and Premier Kosygin +_ake advantage of Asian concerns about China were in Finlaod and Sweden, respectively, last and the announced US plan to withdraw mili-/f /'week and appear to have scored modest successes. tarily from Indochina. The proposal was purpose-4' Still both were upstaged in the Soviet press by fully left vague so that it would appeal to the reporting on plans for party chief Brezhnev's visit largest possible number of Asian countries. Mos- to West Germany next month.) cow's chief aim was not actually to create such a A system, but rather to remind Asians of the USSR tWhile Podgorny attended ceremonies in Hel- and its security interests when Asians were pre-(,,t'sinki marking the 25th anniversary of the Finno- occupied with their shifting relations with China b Soviet Friendship Treaty, Foreign Minister Kar- and the US.1 1,+1 jalainen represented Finland at the similar cele- bration in Moscow. Lesser demonstrations of Fin- ~In early 1972 after the Indo-Pakistani war, land's close ties to the USSR included a Soviet the Soviets undertook new demarches on behalf Week in Finnish schools and a large Soviet scien- of Brezhnev's proposal. Brezhnev at that time tific exposition in Helsinki that will run until 15 listed the "principles" on which such a system April. Finnish President Kekkonen's anniversary should be based: speech was obsequious, especially on the sensitive issue of the Winter War of 1939-40, and has garnered stinging criticism in Finland and Sweden. 1 i; 1 ,During Podgorny's visit, Helsinki announced that it will sign the Finnish-CEMA economic co- ? recognition of the inviolability of bor- ;' operation agreement, something Moscow has long ders, advocated. Nothing was said, in public at least, about the proposed free-trade agreement between ? the development of mutually advanta- Finland and the EC. Podgorny did confer with genus bilateral ties. Kekkonen in private for several hours, and a key topic presumably was the Soviet attitude on this These are so anodyne that they give governments problem. Soviet reservations about the EC ar- like Japan and Iran little difficulty, particularly rangement undoubtedly have not lessened.' SECRET Paae 12 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 i'-' SECRET -le litical and economic questions. one. Both sides expect it will result in some progress toward the resolution of outstanding po- tion to come to West Germany. The visit, a first for a top Soviet leader, is tentatively set for 12-17 May. it will be 25X1 a "working visa rather than a state or official 25X1 fter a normal winter lull, the Soviet Navy is ~~11 Kosygin's Uncomfortable Press Conference Alf in Sweden, demonstrations by Jews and Bal- tic emigres and an awkward press conference se- verely damaged Kosygin's hopes of scoring a pub- lic relations success. He had smoother going in his political talks with Prime Minister Palme. The resulting joint communique was bland and avoided explicit criticism of the US. The eco- nomic talks produced no substantial accord. The Swedes complained about the recent sharp drop in Soviet imports of Swedish goods, but the So- viets claimed that inadequate Swedish credits were at fault. The parties agreed to open negotia- tions next month on Soviet uranium enrichment services for Sweden.) ]} [Pravda for two days running gave less play to the Nordic sojourns than to plans for Brezhnev's {n"~ travel. On 5 April, Chancellor Brandt formally announced that Brezhnev had accepted his invita- 7 [Activity in the western Mediterranean in- dIved the helicopter-carrier Moskva and other currdntly engaging in a variety of exercise, sur- veillance, and relief operations. An anti-carrier defense exercise is being staged in the Norwegian Sea. A surface force, led by a Sverdlov-class cruiser, is simulating a carrier force and serving as a surveillance target for Soviet naval aircraft. Except in 1972, the Soviets have conducted similar exercises in the Norwegian Sea for a num- ber of years. Last fall, US-NATO participants in exercise "Strong Express" were treated as aggres- sors by Soviet aircraft performing reconnaissance and simulated air-to-surface missile attacks./ units in a series of anti-carrier and anti-submarine exercises. This activity coincided with the arrival of the initial contingent of submarine relief units from the Northern Fleet. Five F-class diesel at- tack submarines and one J-class cruise missile unit entered the Mediterranean submerged in an appar- ent attempt to avoid detection. The Soviet Mediterranean Squadron will doubtless monitor a US amphibious exercise that begins on Sardinia on 13 April.I 7 [in the Far East, units of the Pacific Fleet are also engaging in spring exercises. Fourteen surface combatants in the Northern Sea of Japan were noted conducting operations on 11 April. (A turnover of ships on the West Africa pa- 'rol also is taking place. An Alligator landing ship 25X1 arrived in the vicinity of Conakry, Guinea, on 9 April, relieving a destroyer that had been on sta- tion since November 1972. 25X1 I SECRET Page 13 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET 'The party presidium's new ideological jour- nal, Socijalizm , has recently stated the case for flexibility in forming wartime alliances and for closer party control of the military-1,The journal opened new ground when it admitted that Yugo- slavia would consider military alliances if attacked and that emergency alliances with capitalist coun- tries are permissible) is a likely candidate for the axe. Last December he made veiled threats against Vienna over the problem of the Slovene minority in Austria. Socijalizm 's complete rejection of "all thoughts of aggressive acts, threats, or pressures against other states" is thus an indirect slap at the de- fense minister. ,Such an admission has long been inhibited BULGARIA: ROOM AT THE TOP by Tito's doctrinaire opposition to alliances of any kind. Heretofore, the party line held to the On 7 April, 44-year-old Dimitur Stoyanov dreamy view that the UN, nonaligned friends, and was appointed minister of interior. He joined a "other progressive forces" would come to the growing number of young leaders who have been rescue if Yugoslavia were attacked. The absence""., moved into prominent jobs in the aging Bulgarian of any substantial effort to save the Czecho- hierarchy over the last two years( slovaks in 1968 destroyed whatever credibility this theory ever had and created pressures in _ [Since party boss Todor Zhivkov has been Belgrade for more solid security guarantees:] ailing and been out of sight for six weeks, Stoya- nov's elevation at this time has sparked rumors of Even so, Tito refused to budge for almost-,-; some dark Balkan intrigue. For the moment, how- five years. He has lately been trying to improve relations with the Soviet Union and thereby re- duce the threat from the East. The Socijalizm article serves to remind the party elite that Brezh- nev's doctrine of "limited sovereignty" could still pose a danger to Yugoslavia. The article, in effect, is a signal that Tito and his colleagues are taking due account of the Soviet threat and that they are looking into Yugoslavia's options. Socijalizm does emphasize that nonalignment is the best policy for normal times, because formal peacetime alli- ances restrict national sovereignty and frequently, prove useless in a real emergency. ever, the change seems to be nothing more than a recognition in Sofia that age is catching up with the Bulgarian old guard. Most of its members are now in their late sixties and seventies, and Zhiv- kov, himself 62, is well aware of the need to groom replacements. After the sudden death of Foreign Minister Ivan Bashev, Zhivkov turned to Petur Mladenov, at 36 the youngest foreign minis- ter in Eurdpe. i lln the party, Ivan Abadziev's star is rising. At 42, he has already been entrusted with a number of delicate assignments, including the thankless task of attempting to patch up party the Yugoslav military was put on notice' ties with the Yugoslavs. Abadziev now appears that its internal role of defending the state against strong enough to challenge Boris Velchev, the domestic enemies is "disappearing"-an admoni- current number-two man, for the title of Zhiv- tion designed to persuade the generals to stay out kov's heir-apparent in the party.% of politics. Tito has generally agreed with critics in the military that the party had been too soft \Washington will get a firsthand look at one on nationalists and liberals, and he has used mili- of the new breed when Deputy Trade Minister tary backing in his purges. Now that he has set Andrei Lukanov leads an economic delegation to about restoring party supremacy, he does not f'~, the US in late April or early May. At 34, Lukanov want further military interference. has been assigned the task of promoting Bulgarian trade with the West. He has already had some fhe article hinted at personnel changes in success in economic talks with the British.) 25X1 the military hierarchy. Defense Minister Ljubicic 25X1 SECRET Paae 14 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET The dollar has been relatively strong in inter- national financial markets in recent weeks, and the Europeans have had little difficulty in main- taining their joint float. Since the float was initi- ated on 19 March, the dollar has risen slightly against the joint float currencies. Only modest interventions have been required of European central banks to maintain the joint float. Activity on the international money markets has been sluggish, but the lack of trading indicates hesi- tancy and uncertainty rather than faith in the new exchange rates. The mere existence of the joint float band serves as an inviting target for money managers and speculators who have tens of billions of dol- lars at their disposal. Balance-of-payments trends will probably produce short-term pressures for appreciation of the mark and the French franc and for depreciation of the Scandinavian cur- rencies, and any unsettling economic or political news from a country whose currency is involved in the joint float is a potential source of specula- tive pressure. Among other currencies, the yen will be under upward pressure and the Swiss franc and sterling subject to downward pressure; any substantial variation from present exchange rates by any of these currencies also will have a de- stabilizing effect on the European band. Unless the Europeans demonstrate a firm determination to support the band when the pressures increase and unless provision is made to control the mas- sive funds available to speculators, a successful attack on the float is likely, probably before autumn. International monetary reform DOING BUSINESS WITH ROMANIA 7 7 [The signing of Romania's first joint owner- ship agreement with a US firm and the visit to the US later this month of a deputy prime minister highlight the positive trend in US-Romanian eco- nomic relations. The joint ownership agreement, involving Control Data Corporation, is the first time Romania has allowed US ownership to accompany an infusion of US capital. The joint venture, to be known as Romcontroldata, will produce computer equipment. Production will be supervised by a joint management staff and board of directors with Control Data holding 45 percent of the equity. Both partners will be allowed to market the computer equipment, and this may indicate that Control Data will not make its most advanced technology available to the Romanians. 7 ' Romania was the first CEMA country to legislate for Western equity participation, but until recently was unwilling to follow through and allow joint ownership. US firms were more reluctant to enter into cooperative production ventures without the benefits of ownership and, eventually, the Romanians, who are much inter- ested in increasing hard currency earnings, gave in. Romania is not alone. Hungary has already enacted a law permitting equity participation, and Poland is considering such a law. These legal changes, along with Eastern Europe's quest for technology and managerial techniques, will con- tinue to attract US capital under terms more favorable to US firms.? Economic relations will undoubtedly be on 2 the agenda when Emil Draganescu, deputy prime minister and minister of transportation, visits the layed until major US-European differences over a number of trade and monetary issues can be re- solved. Most foreign officials feel that long-range monetary stability will require increased US cooperation and a firmer attitude by the Ameri- cans toward trade and financial imbalances. They regard the joint float as a satisfactory temporary expedient but seek a return to a more conven- tional, if slightly more flexible, international exchange rate structure. most-favored-nation status. In the strongest of a series of public and private signals, the Romanian press gave front-page coverage to President Ceau- sescu's comment to a Western journalist that most-favored-nation status would increase bilat- eral trade three or fourfold. The Romanians are interested in offsetting import contracts with bar- ter deals to minimize hard-currency deficits. Even if Romania is accorded most-favored-nation treat- ment it would probably continue to run a trade SECRET Page 15 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET 1 !Prime Minister Andreotti, who comes to Washington next week, faces growing disaffection at home. His tenure is uncertain. Some of his colleagues are already talking about a successor government but hope to postpone decisive action until June} !Discipline in the government parties is fee- ble, and government bills have been faring badly in parliament. On 11 April Andreotti survived two votes of confidence by margins of only four. He has been holding to the view that only his defeat on a formal vote of confidence would cause him to resign. This position is contrary to custom, but it has lengthened Andreotti's stay as prime minister. Only once, in 1953, has an Italian goverment been ousted through a vote of no confidence; usually the fall comes about by party action outside parliament) 3 Last week, Vice Prime Minister Tanassi's Social Democratic Party officially invited the Christian Democratic, Republican, Liberal, and Socialist parties to separate meetings with the Social Democrats for preliminary soundings on how and when to change the government. The Tanassi initiative is taking hold and some meet- ings may be held soon. In talking with US of- ficials, Tanassi has declared that he distrusts the Socialists, but publicly he has expressed hope for a return to the center-left formula of 1962-72. The center-left included Socialists as well as Chris- tian Democrats, Social Democrats, and Repub- licans. Business-oriented Liberals replaced the Socialists in 1972.) r; \These formal inter-party meetings must Work out agreements on economic policy and on relations with the Communists. The Republicans, Liberals, and Socialists lay particular stress on economic issues while the Social Democrats emphasize the Communist question. The Chris- tian Democrats are deeply concerned with both.) y (Despite a more pro-business government orientation during the past year, Italy's economy is showing few signs of a strong self-sustaining revival. The present government's program to stimulate the economy and restore rapid growth will help boost consumer prices eight percent this year. Labor-oriented political leaders feel the program is skewed in favor of business and against the consumer. The government's failure earlier in the year to float the lira jointly with other EC countries is also controversial. The Republicans, in particular, claim that the Andreotti gov- ernment is repudiating Italy's long-standing com- mitment to European unity[ (The Communist issue was played up by both the Christian Democrats and the Social Demo- crats in campaigning against the Socialists in par- liamentary elections last May. Christian Demo- cratic leaders were responding to pressure from their own voters who threatened to defect to right-wing parties. The Christian Democrats now will be anxious to see the Socialist Party take new public positions which can be adduced as repre- senting greater conservatism, even if the changes are only for appearances. The Social Democrats, on the other hand, value Socialist loyalty to the center-left formula in local and regional gov- ernments as well as in Rome; this would require the Socialists to forgo good jobs in Communist- dominated local governments.) I Even if discussions go smoothly, a change of government may be delayed. Political leaders want first to assess the strength of left and right within the Christian Democratic Party. The leaders will be able to do this at the party's congress scheduled for early June; they will not push for a government change before then, al- though one may be forced upon them by growing disaffection. SECRET Paae 16 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 '00' SECRET J in this tiny Himalayan kingdom. Weeks of unrest, culminating in several days of demonstrations, led this week to negotiations aimed at a compromise between the 50-year-old chogyal (ruler) and the opposition, which is dominated by ethnic Nepalis. SIKKIM: POLITICAL UPHEAVAL >r Important political changes are taking place "I J limited authority. His new role is likely to be spelled out in a written constitution and a one- man, one-vote system. The State Council may be expanded to give the Nepalis representation pro- portionate to their numbers. The latter, mostly Hindu, make up 75 percent of ! l ;_~ rBy encouraging more representative govern- the 200,000 people in this Indian protectorate. ment, New Delhi may create problems for itself. They are demanding an end to political and eco- ) Nepali youth leaders are committed to ousting nomic discrimination that favors Sikkim's original 'f-~the chogyal completely and might not be satisfied inhabitants, the Bhutias and Lepchas, who are. with the political compromise New Delhi has in Buddhists and culturally oriented toward Tibet 112/mind. In the end, however, India, whose officials fill key positions in the Sikkimese bureaucracy, [The current unrest was sparked by elections can be expected to take whatever measures are last January to the 24-member State Council. The necessary to preserve Indian security interests Indian pressure, sub- sequently "requested" India to take over full administration of his kingdom. There were few casualties, and the royal family, including the chogyal's 32-year- old, American-born votes were counted, the Nepalis accused the gov- ernment of rigging the elections, and skirmishes broke out between the rival communities. Things quickly got out of hand, and the chogyal had to ask for Indian assistance. The approximately 30,000 Indian soldiers regularly stationed in Sik- kim restored order. The chogyal, possibly under wife, was unharmed/ LA capable Indian official was sent to iJ,Gangtok to assume administrative control. 2 He will also try to work out a compro- mise between the ruler and the Nepalis. The chogyal will have little alternative but to ac- cept an Indian,-dictated compromise.1Such a compromise will prob- ably curtail his already Delhi is not likely to permit any substantial change in the 1950 Indo-Sikkim Treaty, which gives India control over Sikkim's defense, external affairs, and communications. The Indians are anxiously looking for Peking's reaction to this sign of instability on India's northern fron- The Chogyal (1) In Happier Times SECRET Page 17 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET KUWAIT-IRAQ: STALEMATE \Three days of direct negotiation brought no solution to the impasse growing out of Iraq's seizure on 20 March of a police post on the Kuwaiti side of the border. Iraqi Foreign Minister al-Baqi was in Kuwait last weekend, ostensibly to begin negotiations on a border demarcation, but he arrived without authorization to conclude a border agreement or to compromise on Iraq's demands for Kuwaiti territory. When Kuwait proved equally unbending, al-Baqi packed up and went home.; ' aghdad looks deadly serious about retain- ing control of the area it occupied. The area overlooks the Iraqi naval base at Umm Qasr. Baghdad may have withdrawn some forces from the disputed area, but Kuwaiti forces have not reoccupied it. Iraq covets the Kuwaiti islands of al-Warbah and Bubiyan, which are strategically located on the approach to Umm Qasr4 Kuwait holds that the border runs where a somewhat vague 1963 bilateral agreement said it did, and the Kuwaitis are willing only to negotiate a more specific line. The territory under dispute is clearly inside Kuwait. The Kuwaitis are somewhat more flexible on the two islands; they might agree to lease a part of both, but they will not entertain any arrangement which permanently cedes the islands to Iraq. The dispute thus remains stalemated. Kuwait may try for another round of direct talks, or request further mediation by other Arab states, or appeal to the Arab League for intervention. The desirability of UN mediation is also being weighed. Each of these courses, except the last, has been tried before to no avail, and there is little reason to expect that further diplomatic effort will be any more fruitful. The Iraqis con- tend, in blithe disregard of the 1963 agreement, that the territory they occupy is rightfully theirs, and Kuwait is in no position militarily to elect RHODESIA: GROPING s+f Prime Minister Smith told the Rhodesian parliament last week that he would try once more to settle the seven-year-old dispute with Britain over Rhodesia's unilateral declaration of inde- pendence)Although Smith may have an ace up his sleeve, it is more likely that he is reacting to economic and political pressures that could be alleviated by international recognition] f ej' ]According to Smith, he will seek to convince the British that most black Rhodesians have come to accept the provisional agreement negotiated between London and Salisbury in November 1971. Bishop Muzorewa, whose African National Council convinced the visiting Pearce Commission in early 1972 that most black Rhodesians SECRET 7 a a Kuwait Mina'al LAhmadi Page 18 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 ? SECRET Now opposed the agreement, declared last week that the Council still rejects it))Smith may claim that the Council is no longer as broadly representative as two other groups, the African Settlement Con- vention or the Rhodesian Settlement Forum.] [In London, British officials have professed surprise at Smith's latest move. They doubt that he has any basis for asserting that black opinion is shifting in favor of) the 1971 agreement, which would put off majority rule for at least 30 years. Although the Heath government would like to recognize Rhodesian independence and cancel economic sanctions, it must consider domestic opinion to the contrary, as well as the reactions of such major trading partners as Nigeria. The British public was aroused against the Smith regime last week, hen it secretly tried and prison sentenced Peter Niesewand, a Rhodesian jour- nalist who has reported for both the BBC and Reuters.;' (Nevertheless, Smith may feel that his hand is being forced by adverse developments in Rho- desia. The drain on Rhodesian foreign currency since international sanctions were imposed in 1966 has been aggravated this year by the impact of a severe drought on agricultural exports and by the closure of the Zambian border. President Kaunda's extension of a trade boycott-originally imposed by Smith in a vain attempt to stop Zambian support of guerrilla incursions-appar- ently reduced Smith's influence among white Rhodesians.) `7( 4Smith's heaviest political liability appears to be the cumulative effect of the insurgency that began last December when some 200 foreign- trained guerrillas infiltrated from Zambia through Mozambique and began to raid farms held by whites. Although no more than a dozen white civilians, soldiers, and police have died, hundreds of reservists have been kept on active duty, a sense of physical insecurity is evident in the white community, and the capabilities of the security forces have been questioned in parliament.] ')u [Although the main group of guerrillas-the Zimbabwe African National Union-has been con- tained in northeastern Rhodesia, a white farmer was recently killed 60 miles south of Salisbury, and two armed terrorists were captured in the capital itself/ 7j ~A settlement with Britain that did not pro- vide for early majority rule would not stop guer- rilla activity, but it would at least reduce, if not eliminate, the impact of international sanctions. Smith claims that the resulting economic progress would be shared by Rhodesian blacks and would make them less susceptible to the militant minority. This is at least questionable, but an end to the sanctions surely would ease the financial bind, facilitate procurement of more materiel for the security forces, and enable more white farm- ers to stay on the land-a critical factor in any counterinsurgency effort.) J lthough such considerations may push Smit toward a new accommodation with Lon- don, there are limits on what he can and will offer. Recent terrorism may have stiffened the feeling in the dominant Rhodesian Front that 25X1 white rule must be maintained, and Smith has always preached that steadfastness would even- tually bring the British around. SECRET Page 19 WEEKLY SUMMARY 13 Apr 73 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 Approved For Release 2007/11/14: CIA-RDP79-00927A010200040001-6 SECRET SOUTH ASIA: FAINT HOPES ;1 Hopes for improved relations among India, Pakistan, and Bangladesh were given a slight boost during the week. President Bhutto's victory on the new constitution should permit him to focus more attention on foreign relations; he followed up his victory with a call on his countrymen to accept the "realities" of the subcontinent and make an effort to improve relations with their -1 neighbors] Bhutto recognizes, however, that he still faces a major task in selling the need for early recognition of Bangladesh to his countrymen, par- ticularly the strongly nationalistic Punjabis.) 11r ~A ranking Indian Government official says that progress toward improved relations among the three countries is likely "soon." He indicated that the recent exchange of views between Prime Minister Gandhi's representative and Prime Minis- ter Mujib were not as unproductive as pictured in the press. The Indian said Mujib concentrated on the need to release Bengali civil servants held in Pakistan since the war. Mrs. Gandhi's representa- tive probed Mujib's position on the approxi- mately 90,000 Pakistani prisoners of war held in India. Apparently, Mujib did not press his posi- ion that no movement on the prisoner issue would be possible until Pakistan formally recog- nized Bangladesh. Mujib made clear, however, that he still feels Islamabad must make the first gesture. )Mrs. Gandhi has been concerned both over growing domestic and foreign criticism that India is violating the Geneva Conventions by continuing to hold prisoners of war. She also worries about the costs of maintaining them. Nevertheless,she is not likely to risk relations with Dacca by using India's considerable leverage as one of Bangla- desh's major sources of economic, military, and technical aid to force Mujib to make major con- cessions on the prisoners.] r, v Dne highly emotional issue could scuttle any early movement toward better relations. Mujib is publicly committed to holding war crimes trials for at least some Pakistani prisoners-150-250 has been suggested as a likely number. He considers it his moral duty to hold such trials. Bhutto has repeatedly warned that war crimes trials would provoke a violent reaction in Pakistan and could destroy any chance for early recognition of Bang- PAKISTAN: NEW CONSTITUTION 1