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May 11, 1973
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Next 2 Page(s) In Document Denied State Dept. review completed Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Secret 11 May 1973 No. 0369/73 Copy N? 50 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 The WEEKLY SUMMARY, issued every Friday morning by the Office of Current Intelligence, reports and analyzes signif- icant developments of the week through noon on Thursday. It frequently includes material coordinated with or prepared by the Office of Economic Research, the Office of Strategic Research, and the Directorate of Science and Technology. Topics requiring more comprehensive treatment and there- fore published separately as Special Reports are listed in the contents, CONTENTS (11 May 1973) 1 Middle East: Rising Tensions; Touchy Situation 3 Indochina: China Moderation; Wet Months; Cambodia; Laos 9 EC: End of a Wrangle 9 Netherlands: Government at Last 10 France: More Missiles 11 Iceland: A Key Resignation MIDDLE EAST AFRICA 11 Turkey: Back to the Barracks 12 India: Food Imports; Military Spending WESTERN HEMISPHERE 18 Uruguay: Generals Pressure Congress 18 The World Energy Problem SPECIAL REPORTS 16 Chile: Another Tough Week (Published Separately) Libya: a a i, a igious evo u ionary 25X1 Comments and queries on the contents of this publication are welcome. They may be directed to the editor of the Weekly Summar Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 ' tzu {t I _qW Middle East RISING TENSIONS (A/g c'u'--es ) In the past several weeks, Egypt and other Arab states have taken a number of measures that could be interpreted as preparation for hostilities against Israel. These actions could also be taken as part of an effort to arouse international concern and stimulate new pressures on the US to force Israel to be more accommodating on a peace settlement. There is no conclusive evidence that Sadat has made a decision to attack. Both Sadat and his advisers are aware that their military prospects are poor at best; a fresh disaster might well sweep away Sadat and his regime. His military prepara- tions are not, in any case, complete, and he has not exhausted his political options. The UN ses- sion on the Middle East, now set for late May, and the US-USSR summit will be critical factors. Military moves by other Arab governments seem in harmony with Sadat's purpose. The major gap in the Arab line-up-one to which the Arabs are accustomed-is the refusal of the Jordanian Government to place its forces at the disposal of the "eastern front." The Lebanese flare-up illustrates the danger that military moves might develop a momentum that Cairo would not be able to control. The events of 1967 argue that most Arab governments are not able to resist giving the situation a shove once it has started rolling,. Sadat has said so often that he is now dead serious that it will be pro- gressively more difficult to find excuses for inac- tion, particularly when other Arab leaders have fulfilled their commitments to his cause. Israel professes to see no serious threat of war, although Tel Aviv may be less relaxed than it has indicated. The Israelis are watching most par- ticularly for any signs that the Egyptians or other Arabs are developing a serious capability to dam- age Israel itself. Such a development would lead the Israelis to consider a pre-emptive strike.' SECRET Top to bottom: Cairo, Beirut, Moscow Page 1 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SLUKL I I I After a week of fitful fighting with the fedayeen, the Lebanese Army appears to have gained the upper hand..1The Lebanese are cautiously optimistic that the army's forceful tactics and the broad popular support for President Franjiyah's tough stand place them in a strong position vis-a-vis the guerrillas\ 1( \The air strikes and artillery fire against feda- yeen positions in Beirut and the Arqub-Fatah- 'y land-in the southeast appear to have had a sobering 1 effect. The army's liberal use of its firepower has inflicted heavy losses.) iThere are still incidents of terrorism staged by extremist fedayeen bent on shattering the truce. Fedayeen-army joint committees have begun en- 1`?-'forcing the cease-fire in Beirut, but they will have trouble reining in the extremists.,) Communal differences have not e~tac or in the conflict so far. 3 15 Beirut sees Damascus' limited involvement as no more than might be expected in light of Syria's generally hostile attitude toward Lebanon and pres- sures from within the Syrian power elite for support 3 of the fedayeen:)~ince the fighting began, the Syri- ans have allowed an estimated 1,000-2,000 fedayeen to infiltrate into Lebanon, but have not committed Syrian regulars. fhe uproar in Lebanon is an embarrassment to Egypt and the other Arabs because it distracts inter- national attention from what they see as the broader aspects of the Middle East conflict. 1 I The Israelis are keeping a close watch on their border with Lebanon. The prime question for Tel Aviv is how far Syria will go in support of the fedayeen in Lebanon) Israeli Defense Minister Dayan on 9 May indicated that Israel had no intention of acting as a "policeman in an inter-Arab quarrel." At the same time, he issued a public warning to Damas- cus that Israel would take action if Syrian regular Israel's borders. forces entered Lebanon and took up positions on SECRET Page 2 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 "'btu l-{t I NuOr Indochina !Chinese diplomats have indicated privately for months that Peking favors an end to the fighting in Indochina for several reasons. Prolon- gation of the conflict would, in China's view, only serve to inhibit improvement in relations with the US while cessation of hostilities would enhance China's prospects for reaching its own political goals in Southeast Asia. Toward this end, the Chinese have urged their allies to the south to tively strong Communist positions in Laos and Cambodia, while reducing chances for US rein- volvement. On Laos, Peking may have urged Hanoi to move ahead with a new government. On Cambodia, Peking clearly hopes that Sihanouk will gain a major share of political power in a postwar government in Phnom Penh. Peking ap- parently believes, however, that a more flexible bargaining position might be more attractive to Washington. avoid actions that might provoke US reinvolve- ment. Some officials have suggested Peking is ,People's Daily on 25 April used a different prepared, if necessary, to press Hanoi harder on formulation than heretofore in outlining Peking's this score; one even hinted that China might go so terms for a settlement. The paper called only for far as to end its military assistance. _22an end to US military interference in Cambodia. A b 2-`, )The Chinese apparently have taken another look at the situation in the wake of recent devel- ,,Y,opments which heightened concern that Indo- china after all might not be removed as a major issue in big power politics. Following discussions in Peking with Communist leaders from Indo- china, the Chinese put out a series of authorita- tive statements which suggest that Peking has indeed interceded again and called for greater tactical restraint .Z 1 Running through the statements has been a clear implication that it is time for the Commu- nist side in Indochina to show a greater effort at compliance with the cease-fire agreement. An editorial and commentary in People's Daily and a message signed by Chou En-lai treated the provi- sions of the cease-fire agreements dealing with "foreign" forces in a manner suggesting Peking had Hanoi in mind as well as the allied side. By contrast, the Chinese in the past have been ex- plicit that the US and South Vietnamese were at 25X1 fault. -- r The Chinese in private may have told the Indochinese that a more flexible Communist stance would turn to better advantage the rela- out a month ago, Chou publicly insisted on an end to all US involvement, political and economic as well as military. A year ago, the North Viet- namese, in a show of flexibility, uncoupled their demand for a US military disengagement from Vietnam from their demand for an end to US political and economic involvement in Saigon? [The possibility that the Communists might use their newly infiltrated men and materiel in a major offensive this spring is rapidly diminishing. Earlier than normal rains have already begun to slow movement on the Ho Chi Minh Trail and will soon impede the Communists' ability to receive vital combat support from back-country bases. Drier weather prevails along the northern coast during the summer, however, so major combat would be more likely to occur there than else- where.7 SECRET Page 3 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Mr" %WL_'-, I t" I 7 (preparations for a big campaign are almost totally lacking at present. The Communists' major military effort during the wet summer months, therefore, seems likely to go into rebuilding, realigning, and consolidating their main forces, their logistic system, and their spe- cialized sapper and artillery units.) L"c \The Communists probably assume that emphasis on rebuilding their forces and on tactics like artillery harassment and small-scale raids will give them a capability to defend most of what they now control and a much improved military position by next fall's dry season. Troubled But Trying ~q ,Some of President Thieu's political oppo- nents are becoming more active, but they do not pose much of a threat to the government. Last week Big Minh, still Thieu's most prominent op ponent, issued his second recent statement criti- cizing both Saigon and the Viet Cong for their "meager" attempts to implement the cease-fire agreement. Minh is clearly pointing to his availa- bility to play a role in a peace settlement as a "third force" leader. His statement received some publicity in the Saigon press. It drew a rebuttal from the government that it contained nothing "new, concrete, or reasonable" and that a "so- called third segment" does not exist in South Vietnam.] Page 4 5 \The An Quang Buddhists, the most impor- tant opposition group, are still divided, in part over political tactics, but they continue to resist ?' pressure to move closer to either the government ,or the Communists. More Problems in Agriculture anoi is beginning to focus more intently on persistent production problems in agriculture. The North Vietnamese leadership has complained in a series of recent editorials that the people are paying too much attention to private production and not enough to the collective economy-a SECRET WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 "'Jtuht I Ifte complaint and a problem as old as the regime itself. The recommended remedy is also a familiar one-to increase material incentives, a prescrip- tion long associated with party leader Le Duan. This time around the leadership is trying to entice the peasant-away from his private plot by making work for the collective more attractive. The arti- cles recommend better pay for better work and increases in peasant income in general. Concern with lagging agricultural production '- has increased considerably since the cease-fire, and Hanoi planners are obviously anxious to get back on the road to self-sufficiency in food pro- duction as quickly as possible. The prospects in the near term are not promising. The current spring crop is having problems, according to pub- lic pronouncements which put the blame as much on the weather as on inadequate collective man- agement. Unusually warm weather has indeed brought on insects and disease, drought has af- fected several areas, and the peasants are having special difficulty with the high-yield strains that make up roughly two thirds of the crop. f CAMBODIA: POLITICAL PITFALLS w JThe selection of a ne prime minister in Cambodia is rarely an easy undertaking and the several policy issues. The council and party repre- sentatives have agreed on the need for new elec- tions, but they preferred to avoid additional dis- pute on this delicate subject and deferred decision on the type and timing. On the military side, they agreed to place the armed forces under civilian control, presumably through the prime minister's office. This move appears to be designed to reduce President Lon Nol's overinvolvement in military affairs-something that the three other council members are determined to achieve.? The Military Situatign 2 ,Meanwhile, t`/ Fhe fighting continues along familiar lines. Heavy air strikes have not dislodged Communist troops from their well-entrenched positions along sections of the Mekong. A re- supply convoy en route to the capital from South Vietnam was attacked on 6 May, and two of the convoy's nine ships were badly damaged. The Communists also maintained a grip on stretches of most of the principal highways leading to Phnom Penh~j new ruling body in Phnom Penh-the four-man 3cl ~lf Phoumi Vongvichit brought back High Political Council-is finding this out. Since negotiating cards when he returned from its installation late last month, the council has Neua two weeks ago, he is holding them very met frequently with representatives of two of the close to the vestajln meetings with Prime Minister country's three political parties to try to decide"kj Souvanna Phouma and Souvanna's personal on a new prime minister. Negotiations bogged envoy, Pheng Phongsavan, Phoumi has merely down early in the week when Republican Party repeated the demands that have stalled lower level leader and council member Sirik Matak unex-)(,, talks j(Consequently, government officials believe pectedly nominated a political nonentity from that Hanoi will not allow the Lao Communists to the pro-government Socio-Republican Party as his choice for prime minister. Matak's move appeared to be a Byzantine bid to enhance his own political position. Whatever the case, council members In Tam and Cheng Heng reportedly are strongly op- posed to Matak's candidate. If a compromise is not reached soon, the council itself could founder. Aside from the prime ministerial hassle, some progress has been made in dealing with conclude a final peace agreement until cease-fire problems in South Vietnam are resolved and until there is some movement toward a solution in Cambodia. This could well be the case. Still, Souvanna is now in personal charge of the nego- tiations, and agreement might be reached quickly once the Communists are ready. When Hanoi gave the Lao Communists the green light in February, the two sides surmounted considerable obstacles in a matter of days SECRET Sam Page 5 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Next 2 Page(s) In Document Denied Iq Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 'SECRET EC: END OF A WRANGLE The EC Council on 1 May reached agree- ? The smallness of the increase in the grain ment on farm prices, but only after one of the support price is good news for US exporters. In EC's most difficult, confused, and bitter meet-;:.T addition, the EC apparently refused to discuss a ings. The enlargement of the community this year French proposal to include soybeans-a major US to include the UK, Ireland, and Denmark con- agricultural export to Western Europe-in the tributed to the acrimony, particularIX because EC's protectionist farm support system. A new Britain is opposed to higher farm prices. margarine tax, which the US opposes, also failed to materialize, despite considerable European interest in such a tax as a way of tackling the ;!Concern that a deadlock would paralyze not butter surplus.` only the common agricultural policy, but other EC activities as well, pushed the Nine into a The EC now can prepare for a thorough compromise. It includes a big price rise for meat, review of farm policy this fall. Proposals probably especially beef-which is in short supply-and will include increased direct national payments small increases for grain and beet sugar. The com- for poor farmers to supplement income earned in promise calls for incentives to farmers to en- the market. The present system, based almost courage them to switch from milk production to entirely on price supports, has become harder to beef and veal; manage because of monetary instability. More- over, German and British resistance to financing the family farm in France and Italy under the present system is now so strong that it adds force to talk of reform.- [The extraordinary difficulties of the recent meeting have led to harder thinking about the inefficiency of EC decision-making in general. Danish Economic Minister Norgaard, who takes over as council president for a six-month term in July, told American representatives in Brussels that he had been disgusted at spending 100 chaotic hours negotiating a compromise "which should have taken 10 hours at most." Norgaard is aware of the usual argument that such marathon sessions are the only way to achieve critical EC decisions. He is also well aware of the resistance he will meet if he moves to rationalize council procedures. He has, however, talked with the British who also find council methods annoying and expects their strong support. The Netherlands A GOVERNMENT AT LAST l coalition cabinet is finally taking form more than five months after the parliamentary SECRET Page 9 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SECRET elections; it is an unhappy compromise that is not likely to endure. For as long as it does last, the new center-left government will have to proceed cautiously. J JAfter the inconclusive elections in Novem- ber, the excessive number of Dutch parliamentary parties and the intransigence of their leaders hampered efforts to form a new government. The 150 seats in the Second Chamber are divided among ten parties. Some of these are aligned in two general political groupings. The socialist "Progressives," composed of the Labor, Demo- crats '66, and Radical parties, hold 56 seats. The moderate-right "Confessionals," composed of the Catholic People's, Protestant Anti-Revolutionary, and Protestant Christian Historical Union, hold 48 seats. Neither grouping could muster a majority without the other. After months of haggling, the progressives were able to break up the confessional group and convince elements of the group to join a new coalition.; iThe coalition cabinet, with Labor floor leader Joop den Uyl as prime minister, will con- sist of ten ministers from the progressive and six from two of the confessional parties. The Christian Historical Union stubbornly refused to take part. Last week, the cabinet-to-be agreed to a program that will satisfy about 80 percent of the pre-election program of the confessional group while moderating part of the progressive program. Neither group will be satisfied with the com- promise program, which will not be formally announced until next month, but both sides will have to proceed with it in a businesslike manner if they want their coalition to get anything d on FRANCE: MORE MISSILES rf !Armed Forces Minister Galley confirmed late fast week that France intends to build a third group of nine IRBM silos at the St. Christol complex. The French for many years have planned to have a force of at least 27 I RBMs; the first group of nine became operational in 1971, the second in 19727 The announcement presumably means that construction on the third group will now be resumed. Work on this group was halted in 1969, when former Defense Minister Debre announced that completion would await the development of an improved missile with a thermonuclear war- head. SECRET Page 10 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SECRET 'r` ICELAND: A KEY RESIGNATION The sudden resignation last week of Han- nibal Valdimarsson from his two cabinet posts was a sharp blow to the Icelandic Government. If Valdimarsson's party, the Organization of Liber- als and Leftists, does not appoint someone to fill the vacated cabinet positions, the government could fall, this may have been Valdimarsson's objec- tive. He still has his parliamentary seat and his post as party chairman. Valdimarsson used the issue of bringing the fishing dispute with the UK before the Interna- tional Court of Justice as an excuse for leaving the cabinet. The opposition parties have held that Reykjavik can present a valid case to the court that Iceland's economic survival is dependent upon wider fishing zones, and Valdimarsson members of Valdimarsson's party oppose present- ing the dispute to the court.; T'-1 )Progressive Party leaders, particularly Prime Minister Johannesson and Foreign Minister Agustsson, are in political trouble because they have made no headway in resolving the fishing dispute.ln waters off Iceland, the dispute has led to collisions and gunplay in the last two weeks. The latest round of negotiations with the British --was broken off on 4 May The British foreign secretary has threatened to `"send in the navy" if further serious incidents occur. I Iln the event of a collapse of the present government, its likely successor would be a cen- ter-right coalition of the Independence Party, the Social Democrats, and Valdimarsson's party. Such a mix would be less antagonistic to the US on the base issue. Prior to Valdimarsson's resignation, Agustsson had threatened to bring up the base issue formally in NATO. He subsequently prom- 25X1 ised, however, not to move on the matter until agreed. The Communist People's Alliance and the after the Nixon-Pompidou meeting in Reykjavik Progressive Party, the primary members of the on 31 May - 1 June. present three-party coalition, as well as some TURKEY: BACK TO THE BARRACKS ' The course and outcome of the three-week- long presidential race this spring signaled a shift in the balance of power in Ankara from the military commanders back to parliament. Military officers have long been a potent force in Turkish politics and their role became more pronounced after forcing the re s. nation of Prime Minister Demirel in March 1971. "q IThe presidential race was not a straight con- test between the politicians and generals, al- though it had that appearance in its initial stages. Had the military been united behind former Gen- eral Staff Chief Faruk Gurler, touted as the mili- tary's choice, he would very likely be occupying the presidential palace today. In fact, the bold- ness of the political leaders in rejecting Gurler was in large measure due to Justice Party leader Demirel. He perceived, quite correctly, that Gurler was not especially popular with his fellow officers and that differences existed in the mili- tary over its proper role in national political life. Demirel judged that these factors would inhibit the armed forces from moving against parliament if Gurler's candidacy were rejected. Demirel reasoned that the situation gave parliament the opportunity to assert civilian supremacy, to pay back some old scores with the military, and to jettison the practice that the president is chosen from the ranks of active officers.] SECRET Page 11 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SECRET 7y( !Come August, when the annual military pro- motion and assignment lists are published, it is likely that those general officers identified with Gurler or with anti-parliamentary activity will not get another star or will be sent down to isolated or nonstrategic ports.\ The officer who will benefit most from the election will probably be General Faik Turun, commander of the First Army in Istanbul; it is possible that he will become commander of the ground forces. Turun was lukewarm to Gurler's candidacy 11The military remains one of Turkey's most powerful pressure groups, but the presidential election spotlighted its weaknesses. Its new com- manders have apparently withdrawn from inter- 25X1 ventionist politics and clearly do not want to be involved in the messy business of day-to-day gov- ernment. Civilian government has won another chance to show what it can do. 7' lNew Delhi is using stopgap measures to meet the country's serious food shortages and is still hoping to collect sufficient grain at home to avoid heavy spending for grain imports. There are indi- cations that India will soon try to buy 2 to 3 million tons of food grain abroad. More may be needed. If larger amounts must be imported, Indian officials indicate they will seek long-term credit, perhaps from the U'S under the PL-480 program.' ?Food supplies are tight throughout India. The situation in hard-hit Maharashtra, where riots broke out in mid-April, improved somewhat in the past few days after the arrival of special "wheat trains" from north India and more ships with imported grain. Four states have had food riots or demonstrations in the past ten days and more are expected. There well may be famine in various areas, and New Delhi is trying to avoid publicity by limiting movement of foreign news- men in serious drought areas of central and west- ern India.': Only about half of the 1.65 million tons of grain India purchased abroad-mainly in Decem- ber and January-has arrived. Congestion in US ports, winter closure of Canadian ports, and the high cost of ship chartering have delayed loadings. Moreover, normal distribution channels were dis- rupted when the wholesale grain trade was na- tionalized on 1 April. In some drought areas, no free-market grain supplies are available. In areas where grain is available, it costs two or three times the price in government-subsidized ration shops. 1 ;Government collections from the wheat harvest now under way are going badly. The crop SECRET Page 12 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SECRET `r is estimated to be at least as large as the 26.5 million tons produced last year, but by early May the government had obtained only about 600,000 tons of a planned 8 million tons. Some merchants and farmers reportedly are encouraging and even financing the retention of grain on the farms. They are protesting the take-over and the low government purchase price. Farmers in some grain-surplus areas are threatening to feed their wheat to cattle and sell instead their coarse grain. Prices for the latter are higher because they are not government-controlled;, price be raised to encourage deliveries. If New Delhi agrees, it would have to increase either the ration shop price which would be incompatible;," with Mrs. Gandhi's program to help the poor, or its grain subsidies. It is likely that even a modest increase in the purchase price would sharply improve deliveries to government purchasing agents and still permit the government to get domestic wheat more cheaply than imported wheat. I military materiel have increased by 75 percent in the past three years, while domestic military production has increased by 55 percent. The budget for the current fiscal year (April 1973 through March 1974) calls for $526 million in military imports. Two thirds of this is allocated for finished materiel; raw materials, components, and license fees for domestic military production make up the remainder. A part of these imports, particularly weapons, is financed by medium- and long-term credits. I Yw- [The amount of grain that India will import is YS ipomestic military procurement now con- J, still unsettled. On 1 May, New Delhi press re- -` stitu es about 70 percent of total military pur- ports, apparently based on leaks from the Indian -- chases. Non-government enterprises are expected 1.3 cabinet, stated that India planned to import 6-7 to supply about 60 percent of domestic defense million tons "in the next several months." This needs in 1973/74, including petroleum products million tons of wheat purchased abroad, India must set aside about $125 million. Sorghum and corn would be about 25 percent cheaper, but Indian consumers view these as poor substitutes. India's foreign exchange reserves amounted to $1.1 billion at the end of March, or the equivalent of about six months' imports. The ambassador- designate to the US, T. N. Kaul, has raised the possibility of getting credit for grain purchases in the US. MILITARY SPENDING UP Although severely strained by shortages of [New Delhi is studying its options. State food ;,.food and fuel, the Indian economy is supporting officials are urging that the wheat procurement S' ;continued heavy military spending. Imports of leak no doubt was intended to relax tensions among consumers and discourage domestic hoard-'! ing and speculative buying. Mrs. Gandhi quicklyl denied the press stories. Iq [Foreign exchange considerations will weigh heavily in any decision on food imports. For each Domestic 570 604 842 882 918 Domestic Input 474 494 718 714 741 Foreign Input 96 110 124 168 177 Financed by Military Aid -90 -92 -191 -130 NA Military Debt Repayments 100 113 120 150 NA Total Estimated Foreign Exchange Outflow 304 345 361 535 NA SECRET Page 13 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 SECRET and foodstuffs. Ordnance factories and enter- prises under the Ministry of Defense Production will provide the balance, including jet fighters and other aircraft, naval craft, tanks, artillery, mis- siles, radar, transport vehicles, ammunition, spare parts, and clothing. Output under the ministry in 1972/73 is estimated to have been $508 million, with 78 percent going to the Indian military, 19 percent to the civilian economy, and the balance for export:[ India has relied on foreign collaboration to build its defense industries, and most military equipment is still produced under foreign license agreements. The UK and several West European countries supply most of this assistance. The So- viet role in domestic production has increased, but remains comparatively small. In contrast, the 1\IUSSR and Eastern Europe are the principal sup- pliers of finished military equipment to India, New Delhi plans to limit foreign participa- tion in the manufacture of military equipment. On 25 April, the government reaffirmed its policy of not entering into new foreign license agree- ments for production of military commodities. Indian-Built HF-24 Fighter New Delhi will endeavor to design and produce military equipment domestically but will still depend somewhat on foreign technology. India is attempting to develop a surface-to-air missile and an armored personnel carrier along these lines. Existing licensing agreements will not be renewed automatically, and all defense plants have been instructed to develop indigenous versions of equipment now produced under license within a fixed period of time. These measures probably will have little impact immediately on foreign exchange outlays. They do, however, add to the cost of India's military program and delay new weapons systems. r ' The government further plans to improve India's capability to produce its own raw materi- als for the defense industries. It is negotiating with several foreign firms, including Westing- house, to purchase machinery and technology for a special metals and super alloys plant. This $64-million facility and a proposed $67-million special steel plant are expected to provide the defense industries with the ability to produce a wide range of metal products now bein im orted for defense production. Indian Helicopter Production Line SECRET Page 14 WEEKLY SUMMARY 11 May 73 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 Approved For Release 2008/06/09: CIA-RDP79-00927A010300010001-8 CHILE: ANOTHER TOUGH WEEK Historically disdainful of political turmoil in the rest of Latin America, Chileans have in recent months come to accept tension and confrontation as the norm in their own country. The imposition of a state of siege in Santiago on 5 May evoked only minor reaction, and this was nearly lost in the shrill public charges and countercharges of conspiracy and treason] [Military officers are now quite concerned over growing public disorder, but they still appear uncertain whether or how to put effective pres- sure on President Allende. They do not even know whom to trust among themselves. Although another round of land seizures, contend that this is further proof of their claim that farm owners are ready to massacre peasants. Allende now believes the extreme a is s are growing stronger and less controllable. He may, in fact, see them as posing as great a threat to him as the ultra-right- ists. This concern is behind his cautious campaign to wean his own Socialist Party from its radical leadership. At the same time, he does not want extremist Secretary General Carlos Altamirano to make an open break with him With Altamirano in the USSR for a month's medical treatment, Foreign Minister Clodomiro Almeyda will soon leave the cabinet to devote full time to his new role as party undersecretary for government relations. Almeyda is the sole survi- vor of Allende's original cabinet. He is highly regarded, even by his enemies, for his handling of Chile's foreign affairs. Along with two other for- mer Socialist cabinet ministers, who have appeal to the radical left, Almeyda appears to be the nucleus of an effort to make the party more responsive to Allende's leadership. 1, recent roadblocks of major Santiago arteries by