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May 25, 1973
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Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Iq Next 2 Page(s) In Document Denied State Dept. review completed Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Secret WEEKLY SUMMARY Secret 25 May 1973 No. 0371/73 Copy N2 42 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 The WEEKLY SUMMARY, issued every Friday morning by the Office of Current intelligence, rep?5rts and analyzes signif- scant deueloprr tints of ?fhe vueek through noon on Thursday. It frequently includes material coordinated with or prepared by the Office of Economic Reseaech, the Office of Strategic Research, and the l irectorate of Science and Technology. Topics .requiring more comprehensive treatment and there 25X1 fore published separately as Special Reports are listed in the contents. CONTENTS (25 May 1973) 1 Moscow Faces West 3 Argentina: Return of the Peronists 4 Iceland: Enter the Royal Navy 5 Indochina 6 Burma: Detour in the Road 7 Korea: Pyongyang's Gain 9 France: Space Launch Series 10 Romania: Ceausescu & Oil 11 Albania: Inoculating Youth MIDDLE EAST AFRICA 12 Arab States: Egypt; Oil; Lebanon; Jordan WESTERN HEMISPHERE 16 Chile: Downward Spiral 17 Panama: New Canal Position 18 Uruguay: Watchful Respite 19 Bolivia: Aftermath of a Plot Comments and queries on the contents of this publication are welcome. They may be directed to the editor of the Weeks summar Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 moscow faces west EMPHASIS ON DETENTE [Last month, the CPSU Central Committee resolved to carry out its foreign policy activities in such a manner as to make detente with the West an "irreversible" fact of life. Having so re- solved, the Soviets have accelerated the efforts to trace their current policy back to Lenin himself and show that the policy has the firm backing of all segments of Soviet officialdom.; Although Moscow's formal treatment of detente makes no distinction among the various Western powers with which the USSR hopes to improve relations, it is clear from Soviet behavior that the US is central to Soviet calculations. For the past several weeks, the Soviets have been playing up everything positive in US-Soviet rela- tions; they have even let the accent on the US overshadow Brezhnev's historic trip to Bonn.7 F The importance the Soviets attach to rela- trions with the US has been indicated in a number of ways. Soviet media have given favorable cover- age to the US and to official statements from Washington, have played down vigilance themes customarily directed against "imperialism," and have given scant treatment of the Watergate af- fair. Continuing problems in Indochina have been largely ignored, and the top Soviet leaders have gone out of their way to meet with visiting Americans (most recent) r, Premier Kosygin's talks with Mayor Lindsay), While Moscow's behavior toward the US can no doubt be attributed in part to Brezhnev's coming trip to Washington, some of the propa- Page 1 ganda, at least, suggests that the Soviet leadership is engaged in an effort to convince its domestic audience of the wisdom of its policy. For in- stance, an article in Pravda last week by Yury Zhukov seemed noteworthy not only as a testi- monial to the Soviet need to deal with the US, but also as a signal to various elements of the Soviet bureaucracy to accept this need./ II (Zhukov said the Moscow summit last year was of "paramount international significance" and quoted Brezhnev as saying that the possi- bilities for further improvement in relations with the US are "real." In defense of detente with the US, Zhukov recalled Lenin's own interest in improving business relations with the US even during the Soviet civil war when US military forces were on Russian territory. Zhukov also cited Lenin's demand in 1922 that Soviet officials responsible for denying visas to American busi- nessmen be severely punished? Earlier this week in Bonn, Brezhnev called the shift toward detente a radical turn in Soviet policy that had been difficult to make. He implied that the leadership consensus is now solidly behind that decision and that he can speak confidently on behalf of all Soviet leaders. In effect, he was seeking to put the US on notice that when he meets President Nixon in Wash- ington next month, the US can expect to be dealing with a politician who is in a strong posi- tion to accept or reject agreements on their merits. Despite this show of confidence Brezhnev, like other political leaders, must be conscious of more conservative colleagues who will be looking over his shoulder.) SECRET WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 `.J 5tUKI I %W 'The billing of Soviet party leader Brezhnev's sojourn in West Germany as a working visit was no euphemism. Plans to squeeze some sightseeing into the trip gave way early on as the business agenda lengthened. His only remaining scheduled jaunt outside the Bonn area was scrubbed when security officials decided the risk of demonstra- tions was too great. As a result, Brezhnev spent about 30 of his approximately 100 hours in the Federal Republic in conversation with Chancellor Brandt. Their top advisers were equally busy./ The visit produced no surprises and was the success everyone expected. Brandt and Brezhnev added to the list of bilateral agreements con- cluded over the last two years by signing pacts for economic, industrial, and technical cooperation; cultural collaboration; and air travel. They opened the way for other agreements and ex- changes in energy, sports, youth, tourism, and medicine. The two leaders also agreed to meet again and to schedule mor frequent political consultations by subordinates !The image of a convivial Brezhnev and his stress on creating a new era of Soviet-German friendship served the Soviet objective of showing their great interest in European detente4Brezhnev may not have been as successful in obtaining commitments for economic cooperation, and such commitments were the major Soviet goal. German firms, for example, are ready to build a steel-rolling mill and a machine-tool factory in the USSR. But the Soviets wanted long-term commit- ments and low-interest credits that the Germans feel they cannot grant. German industrial leaders expressed interest in "medium-term" planning in some fields, but when Brezhnev denigrated inter- est rates as unimportant, he turned off German ban leers/ Plain, hard bargaining characterized the talks. The communique's wording on the Confer- ence on Security and Cooperation in Europe and on mutual and balanced force reduction talks was carefully weighed. Given the Soviet aversion to "balanced," for example, the two leaders settled on the phrase not jeopardizing...security." Brezhnev made his expected pitch that the secu- rity conference be concluded with a summit meeting, but, in the face of Brandt's caution, settled for "at a level corresponding to its inter- national importance."r !Although the three agreements contain a ,)clause extending them to West Berlin, the com- munique does not reflect any softening in the Soviet attitude toward West German ties with the city. The two sides agreed on the need for "strict observance and full implementation" of the Quadripartite Agreement on Berlin: a scant im- provement over the language used during Brezh- nev's visit to East Germany on 12-13 May. The inability of the two sides to agree on a clause on Berlin prevented signature of agreements on science and environment that had been drafted for the visit( i'! IBrezhnev could not have been expected, in any event, to embarrass the East Germans by agreeing to West German desires on Berlin in a public document, and Brandt probably did not anticipate that he would do so even in private conversation. Brandt, Scheel, and Bahr got the point across in the advisers' meetings, and Bonn can only hope to see results in future Soviet and East German actions.! `l n general, the Germans were pleased with r the results of the visit and apparently believe they have made a big stride forward on the inter- national stage. They see both the US and the USSR as being interested in close ties with West Germany, and this has added to a growing sense of self-confidence in Bonn ,,} JThe West Germans found Brezhnev an inter- ._Yesting, if somewhat bizarre, guest. He clearly dominated the Soviet delegation, and the Ger- mans had some difficulty in making their points as the Soviet leader held the floor. SECRET 4 1 Page 2 WEEKL.Y SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 "`SECRET ARGENTINA ;The inauguration of Hector Campora as Pres- ident of Argentina on 25 May propels the Peron- ists back to power after nearly 18 years in the political wilderness. The return to an elected civilian government, which Argentines hope will give birth to a new era of cooperation and prog- ress, is being celebrated throughout the country by Peronist and non-Peronist alike.' The presence of high-level delegations from abroad adds dignity to the ceremonies and pro- vides the opportunity for significant meetings among the various foreign leaders. Secretary of State Rogers winds up his tour of South Ameri- can countries in Buenos Aires, returning to the US by way of Jamaica. President Allende of Chile, Cuban head of state Dorticos, and Uru- guayan President Bordaberry are also in Buenos Aires. Several other Latin American states have sent foreign ministers, including Tack of Panama, who hopes to convey to Secretary Rogers his country's hope of renewing the canal negotiations soon. Juan Peron, the man most responsible for Campora being sworn in as Argentine president, stayed in Spain, preferring, he says, not to divert attention from Campora. It is also true, although he does not say so, that hiis presence on the stand when Campora receives the presidential sash would be like rubbing salt into the military's wounds and might stir up trouble. Peron's ab- sence should not be viewed as indicative of the future. Campora, long Peron's "obsequious serv- ant," has so far given no indications that he can act or make decisions independently of his mentor. IThe cabinet that Campora will bring into power with him is a tightly held secret, which could mean that Peron has not yet told the fledg- ling president who will get what post. Campora has, however, been working on the Radical Party and may hope to entice a Radical or two into his cabinet. Even without the Radicals, Campora should have little difficulty pushing his program through congress, where the Peronists hold a com- fortable majority on their own. His major prob- lem does not lie in finding a working relationship with the opposition, but in holding his own diver- gent coalition together. Minor party members of Peron's election coalition have shown signs of disquiet, and within the Peronist movement itself, differences between middle-aged moderates and young radicals could easily flare into serious prob- lems,? JCampora has also avoided discussing in any concrete terms the policies he plans to follow. Campora Greets Supporters SECRET Page 3 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SLUHL I w Indications are that he will pursue basically mod- erate policies on the domestic front in the hope of obtaining some form of "national accord." On the issue of amnesty for "political prisoners," he will likely urge legislation that in theory provides for sweeping amnesty but in fact requires that each prisoner's case be considered separately. In addition, he is apt to announce, with considerable fanfare, across-the-board wage increases while ask- ing labor to make sacrifices in the fight against inflation.' t! 'i,t the same time, he will try to placate extremists and radicals with nationalistic rhetoric, policies aimed at restricting the profits and activ- ities of foreign businesses, and a more independ- ent approach to foreign affairs. Among the new government's first initiatives will be the estab- lishment of diplomatic relations with Cuba, prob- ably followed closely by recognition of North Vietnam, North Korea, and East Germany. The Peronists are also likely to move Argentina into the forefront of those Latin Americans calling for an OAS that excludes the US.) . ,ln all these areas, the guiding hand of Juan Peron will be evident, although he will probably shun any involvement in the day-to-day functions of government. Instead, Peron seems bent on carrying his message of Latin American unity and integration to everyone who will listen. He sees himself as a political figure of world importance whose primary theater of operations is Latin America. To assure his place in history as a true revolutionary and to give substance to his claim that Latin America must either be united in nationalism and socialism or be "dominated by the imperialists," Peron may press to move Ar- gentina toward more radical policies after he has consolidated his hold on power 25X1 ICELAND ENTER THE ROYAL NAVY "There are occasions when, greatly "daring, it is neces- sary to raise a small and diffident voice in favor of the rights of the strong against the weak." UK Labor Party MP. The introduction of British warships into the fishing dispute has again raised questions in Ice- land about the usefulness of its membership in NATO. All Icelandic political parties condemned London's move and expressed disappointment at NATO's failure to prevent it. Public support for the US-manned NATO base at Keflavik has prob- ably been eroded. On 19 May, two British frigates sailed into Iceland's unilaterally declared 50-mile fishing zone. Their mission was to protect the British trawlers there. Reykjavik prudently ordered its coast guard not to engage the British ships, but closed all Icelandic airfields, including Keflavik, to British military aircraft and recalled its ambas- sador to London. The Icelanders say they will not negotiate as long as the warships remain in the disputed waters, and the British say they will not. withdraw the warships as long as Iceland is likely to harass trawlers. On 21 May, the government asked all Ice- landic political parties for advice on a possible course of action. One proposal under considera- tion is to request the UN Security Council to meet to consider Iceland's charge that the British move was an act of aggression. While a British veto in the council would prevent UN action, the Icelanders probably would hope to gain interna- tional sympathy in the process. Iceland may also ask for a NATO review of the British action, in accordance with that organization's guidelines for the resolution of disputes among its members. Norway has offered to mediate. All else failing, the two adversaries might even get back to the negotiating table without outside help. The Brit- ish reportedly are concerned that Reykjavik may decide to withdraw from NATO. The tense situation provides a far from ideal atmosphere for the visit of presidents Nixon and Pompidou to Iceland next week. Icelanders who were expected to demonstrate against the base may now be joined by their more moderate countrymen who feel the US and other NATO states have deserted Iceland in the fichinn dispute. SECRET Page 4 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 -`SECRET ""' 'Communist military activity this week was at the lowest level since the cease-fire began. Much of the Communist action that took place was in response to South Vietnamese security operations. are numerous gaps in its implementing detail. Further details are expected soon, along with announcements concerning a government reorgan- ization and administrative reforms) ?,i Communist mortar and rocket fire against the outer government defense line west of Hue appears to reflect such a response. Heavy fighting has been reported just north of Kontum City following a government move to replace an army regiment that had arranged a local truce.' The Communists have been openly aggres- sive only in several troublesome delta provinces, and much of their action there seems to be aimed at protecting Communist infiltration routes. Most of the Communist attacks have been concentrated in Chuong Thien and Dinh Tuong provinces and involved shell fire directed at government out- posts and other fixed positions. Elsewhere, the Communists have limited themselves to minor harassment and terrorism. The railroad in Military Regions 2 and 3 has been hit frequently as have the major highways. Several terrorist attacks have resulted in heavy civilian casualties.' Thieu Announces Economic Program The Saigon government is beginning to im- plement a series of measures largely designed to improve its standing in the countryside. Last weekend, President Thieu announced general goals for post-war economic recovery and devel- opment, which call for economic self-sufficiency by 1980. Citing the establishment of funds for refugee relief, reconstruction, and rehabilitation, Thieu emphasized the need to develop agricul- tural production as a basis for future economic growth. He was not precise about foreign support, but large amounts of Free World aid will be needed to achieve the extremely ambitious 1980 targets. l Although the government program repre- sents a good first effort to chart the country's economic course, it is not an integrated economic plan. His targets are unrealistically high, and there Hanoi is increasing the emphasis on recon- struction. North Vietnamese leaders focused on this theme in May Day speeches, and recent reports indicate the rhetoric is being converted into new guidelines for using more of the man- power pool to rebuild the country.) new bill- 25X1 boards in the capital urging young men to join "reconstruction brigades" have replaced military recruitment posters, suggesting that reconstruc- tion has been accorded a higher priority than conscription General Giap hinted on May Day that the North Vietnamese Army would play a prominent role in rebuilding the country, and an editorial}jin the army newspaper on 16 May indi- cates that local militia and self-defense forces will be the first military units to join the reconstruc- tion effort. The editorial urged them to serve as the "shock forces in labor productivity" and to take on difficult long-term projects involving land reclamation and irrigation. ] i [Although the North Vietnamese have started to r allocate at least unskilled manpower to the rebuilding of the country, Hanoi expects difficul- ties in the transition to a civilian economy and is proceeding slowly with the implementation of plans for reconstruction and economic expansion) CAMBODIA: FIGHTING RESUMES X1.3 )The brief lull in Khmer Communist military activity in the Phnom Penh region ended this week when the Communists attacked Cambodian positions on the east bank of the Mekong River near the government base at Neak Luong. The Communists also attacked government positions on the Mekong's east bank midway between Phnom Penh and Neak Luong and along the west bank opposite Neak Luong. Although US air strikes helped government troops hold their ground, there are indications that the Commu- nists will try to keep pressure on Neak Luong. If SECRET Page 5 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 ShUKb I "r the lightly defended base were to fall, the Com- munist threat to Mekong resupply convoys would increase considerably. South of Phnom Penh, Cambodian troops took advantage of the withdrawal of some Com- munist units from the Takeo area to expand that city's defensive perimeter and to clear a short section of Route 2 below Takeo. Other govern- ment forces met little resistance in clearing Route 3 between Phnom Penh and the village of Tram Khnar. Farther west, government units cleared a section of Route 4 some 20 miles northeast of the seaport at Kompong Sorn; the highway is now open to truck convoys. I n the northwest, how- ever, government clearing operations along Route 5 continued to make little headway. Some six miles of that highway are still under Communist control. BURMA: DETOUR ON THE ROAD The government has shifted away from its rigid) pursuit of the Burmese road to socialism that has characterized economic policy during the past decade. The shift follows the Ne Win govern- ment's belated recognition of the severity of Burma's economic problems. Production, invest- ment, and exports are stagnant, and foreign ex- change reserves have dropped to their lowest level in the past 25 years. Rice exports this year are likely to be the smallest since World War 11 as a result of drought and the government's inept rice procurement program. Burma is hopeful that oil will help turn the economy around. It has invited US oil companies to compete with Japanese and other foreign firms for rights to conduct offshore oil exploration. Previously, Rangoon had insisted that financing from abroad come exclusively from governments not private companies. Rangoon is also prepared to negotiate an agreement with the US, which would permit the US Overseas Private In- vestment Corporation to issue political risk insurance to US investors in Burma. Rangoon recently obtained two development loans from the World Bank to improve railroad and inland water transportation. The two loans total about $30 million and are the first Burma has received from the World Bank since General Ne Win came to power in 1962. Burma's joining of the Asian Development Bank demonstrates its interest in expanding economic relations with its neighbors. On the domestic side, Ne Win last month called on all citizens-including those previously forced out of business by his government-to involve themselves in developing the nation's economy. Subsequently, some 380 businessmen, who had been jailed for economic crimes, were released. The government, after seven years, is getting out of the internal trade in food grains. This move is intended to induce farmers to release their stocks of rice and alleviate the current short- age. SECRET Page 6 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 ???r JCUMt I IMW' KOREA: PYONGYANG'S GAIN 'North Korea's admittance into the World Health Organization last week will bolster Pyong- yang's determination to seek a wider international role and will open the door for entry into other UN agencies. Observer status at the General As- sembly this fall is now all but assured.l [The North has, of course, gained in stature by entry into its first major international organi- zation, and this success is encouraging wider dip- lomatic recognition. This week, Iceland recog- nized Pyongyang, while Denmark and Finland opened talks on diplomatic relations.) (Seoul's setback in the World Health Organi- zation will probably prompt it to move cautiously toward acceptance of two Koreas and a realistic adjustment to the changing situation in which it finds itself. It will almost certainly lead Seoul to accept some change in the way the UN handles the Korean issue, including possibly an end to UN political involvement in Korea as represented by the UN Commission for the Unification and Re- South Korea Votes in World Health Organization habilitation of Korea. Seoul is not likely, how- ever, to allow diplomatic setbacks to lead it to compromise on issues it considers vital, such as the stationing of US forces in the South and the continuation of the UN command. SECRET Page 7 WEEKLY SUMMARY 25 May 73 25X1 25X6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001 FRANCE: SPACE LAUNCH SERIES /An attempt early this week to orbit two scientific satellites from the French Guiana space center ended in failure when the third stage of the Diamant B launch vehicle did not function cor- rectly.: 'The last in a series of five Diamant B launches, the abortive try was the second failure in a row after seven consecutive successes over nearly eight years. The other failure came in December 1971 when a malfunction occurred in the second-stage engines.w j France will not resume launch operations from its space complex until early next year. Al that time, a new launch vehicle-designated the Diamant B/P4-should be ready. That launch primarily will be to test the new vehicle, which will carry only a technology test satellite.rA sci- Yientific satellite will first be orbited by the new Diamant B/P4 in late 1974. The new launch vehicle will have a more powerful second stage than the present one. The vehicle's performance should be about equal to that of the improved US Scout, the present work horse of the US space program.,1 ,; 1 )The French have been trying to interest other European countries in using their Diamants on a fee basis. To date, they have found no takers. Paris still hopes to launch satellites for other countries and believes its new Diamant will prove more attractive, particularly to Western Europe. Outside business would help France amortize not only the cost of the launch vehicles but the large investment in its space center in French Guiana] }./ !The center was also set up to handle lunches of space vehicles built jointly with other European countries. The only cooperative Euro- pean launch vehicle programs-the Europa II and III--have been canceled, and a new European launcher program is not likely to produce a new vehicle until 1980. Meanwhile, the largest of the three launch pads at the French space complex robabl will be standiing idle. Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 `"' SECRET President Ceausescu has taken over direct supervision of the nation's economic development and will do likewise with police and security affairs. These steps tighten his already firm grip on the country and put his prestige on the line in economic and security matters, where perform.. ante has fallen short of Ceausescu's demands.l ;_ ; jOn 16 May, Ceausescu named himself head 6f the new Supreme Council for Economic and Social Development. The council, first proposed last year, is designed to increase economic effi- ciency and to ensure quick implementation of party programs and directives. Virtually all top leaders with economic responsibilities have been named to executive positions on the council and are, of course, responsible directly to Ceausescu.] j-, Ceausescu set up the council because of con- y tinued economic inefficiency and balance of pay- ments difficulties. By taking over the council him- self, Ceausescu will have greater control, but will also be more vulnerable to criticism in the event of serious economic difficulties./ ~eausescu also plans to take a direct hand in supervising the nation's police and security ap- paratus. He has fired the minister of interior and i 5the party secretary responsible for military and security affairs. Colonel General Coman, former head of the army's political directorate, will take over the responsibilities but not the title of party secretary; Coman will report directly to Ceau- sescu.; 11 Ceausescu has been concerned over inef- ficie cy and corruption in the security apparatus for some time. The failure of the officials in power to respond to his orders to weed out the incompetent and dishonest apparently prompted Ceausescu's move. Romanian Aid Extended to Third World Oil Industries (1956-72) Country Total Aid Extended (In Million US$) Type of Aid Provided Iraq 35 Exploration and development Indonesia 30 Exploration; refineries Egypt 27 Exploration; machinery and equipment India 21 Refineries; drilling equipment Brazil 8 Drilling equipment Chile 6 Drilling equipment Argentina 3 Drilling equipment Sudan 3 Exploration and development Tunisia 3 Exploration and development Ghana 1 Exploration Morocco 1 Exploration Yemen (Aden) 1 Exploration Syria a/ Oil equipment TOTAL 1391]/ J Less than $500,000. / Does not include oil aid extended as part of large economic aid credits. SECRET Page 10 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SECRET Stories are still circulating in Bucharest about additional leadership changes, but Ceau- sescu's activities suggest that most of the changes he means to make have been made. On 21 May, he was confident enough to take time out from his duties to become the first Romanian chief of state to visit Rome since the close of World War II.? AID TO OIL INDUSTRIES ~ln early May,' Romania signed a $6-million contract to provide oil development assistance to Chile. This aid reflects Bucharest's growing in- terest in helping the less developed countries find and exploit oil deposits. Since 1956, Romania has extended $140 million to 13 developing countries to finance petroleum exploration and develop- ment. Most of this has been extended in the last five years. More than 2,000 Romanian oil workers have been employed abroad, and at least 1,000 oil technicians from developing countries have trained at Romanian facilities. Romania also sells petroleum equipment and provides oil expertise primarily to developing countries and other Com- munist states. In the beginning, Bucharest's involvement in petroleum development in the Third World was limited to countries with little or no production and to those in which Western oil companies showed little interest. In recent years, however, Romania has concluded agreements with more important producers that have nationalized their oil industries. Many of these agreements-including those with Iraq, Algeria, and Libya-stipulate settle- ment of accounts in petroleum, and Romania is acquiring crude oil, primarily to refine and export as oil products. The agreements also are opening additional markets for Romanian oil equipment. Romania is a distant second to the US as a world exporter of such equipment. Although Bucharest still is a net oil exporter, it began importing crudde oil in 1968 and last year imported some 3 million tons. About half of this came from Iran and the remainder was obtained from Algeria, Iraq, Libya, and Saudi Ara- Tirana is taking stern new measures to com- bat ndesirable Western influences. The measures are aimed largely at young Albanians and reflect the leadership's concern that ideological con- tamination could result from increased exposure to the West. The latest in the series of xenophobic moves was an attack on symbols of Western youth culture like long hair and "elephant-bottomed" pants. The number of visitors to Albania, already small, will dwindle further because the regime is refusing entry to long-haired and modishly attired travelers." Tirana has also moved to make sure that popular Italian and Yugoslav radio and TV programs cannot be received in Albania. A teacher has been put on trial for encouraging nonconformist-i.e., Western-behavior among young people as the first step in the formation of a spy network.' The campaign has been accompanied by exhortations to Communist orthodoxy, Albanian style, by calls for a purely national literature, and by an extra measure of anti-religious vituperation. This rigorous line suggests that the leadership is contemplating a modest increase in its diplomatic and economic relations. Cultural agreements are already being negotiated with several countries, including Italy. In addition, cultural contacts with Yugoslavia have been increased, and there are signs that Albania is looking for ways to expand its foreign trade; Such contacts could slowly ease Albania out of its long period of self-imposed isolation. By cracking down now, Tirana is trying to limit the risks in advance. The leadership fears that if the country's youth pick up Western ways, the country would face a monumental generation gap. Its concern is well founded because more than half the country's population is under 19 years of age. SECRET Page 11 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 6 Talk of war from Cairo has abated somewhat as Egypt continues its diplomatic maneuvers in preparation for the forthcoming UN Middle East debate, scheduled to begin on 4 June. The Egyp- tian UN representative has been in Cairo this week discussing strategy for the debate, and Egyptian officials are active in attempts to but- tress their position with other nations. Presiden- 5 -stial adviser Hafiz Ismail returned on 21 May from a one-week visit to Paris and Madrid, and Foreign Minister Zayyat will travel to Moscow for a two- day stop on 27 May. President Sadat will attend the summit conference of the Organization of African Unity this weekend in Addis Ababa, where he apparently hopes for a resolution on the Middle East that will further aid his position at the UN.! i The Egyptians have not yet given a clear idea of their strategy in the Security Council-particu- larly, whether they will urge a re-interpretation of Resolution 242 or will press only for further UN mediation. They apparently wish to avoid a US veto, however, and thus will probably steer clear of provocative debate. A Foreign Ministry official has noted that Egypt is interested in maintaining US "neutrality" as far as possible and will work for a positive, non-condemnatory resolution/ `1 Israel will go along with the debate as a necessary evil and professes confidence that Egypt will not attack the US for fear of ulti- mately weakening its position by arousing a crisis atmosphere without achieving conclusive results. The Israelis are on guard, however, against a reso- lution that redefines Resolution 242 or expands the UN mandate in the Middle East dispute. The Israeli press has expressed some misgivings that '''the UN secretary general's Middle East report, issued this week, will lead to just that) TOn 17 May, the Lebanese Government came to terms with the Palestinian liberation organiza- tions. The "protocol," as the agreement is called, reflects Beirut's tougher policy in regulating feda- yeen activity and is, in effect, a statement of the sovereignty of Lebanese law over Palestinians re- siding in Lebanon.) SECRET - C IThe agreement stipulates that: ? fedayeen units will not be permitted in refugee camps situated near populated areas; ? fedayeen patrols are responsible for se- curity inside the camps; ? criminals within the camps must be turned over to the Lebanese police; ? heavy weapons are to be removed from the camps; ? military training is to be restricted to Syria and eastern Lebanon. Earlier restrictions that continue in force are a prohibition against the fedayeen entering the area near the Israeli border and a Ilan on fedayeen cross-border operations into Israel; While there has been no serious effort thus far tosabotage the accords, the real test is yet to come.- I Further trouble would not be long in coming if the fedayeen attempt to block army efforts to follow through with full implementa- tion of the agreement. The army seems likely to try to remove from the camps at least some of the rocket launchers and mortars that fired on army positions during the fighting earlier this month. There would be considerable sentiment in feda- yeen ranks, especially among the extremists, to oppose such an effort; OIL AND POLITICS Libya, Kuwait, and Iraq took part in a brief oil stoppage on 15 May as a gesture backing the Arab struggle against Jsrael and protesting US support for Tel Aviv.t)The three states were re- sponding to a call by a`conference of Arab profes- sional unions for a one-hour oil-pumping stoppage and a one-day boycott of US interests by all Arab states `j )'The call met little other response, and even the three respondents did not follow the call to the letter. Saudi Arabia a d Abu Dhabi refused to 'participate, and Algerizdespite press reports to SECRET Page 12 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 -'- SEC"I RET -- .the contrary-failed to join/Although Libya ex- tended its narticinatinn to 24 hnurc it rim not part, signifies that the political climate is increas- ingly favorable for efforts of this kind/ ,q [King Husayn is worried that Jordan will be caught in the middle if another Middle East con- flict breaks out. His advisers have told US officials that the King is beginning to take Sadat's talk of LI' war more seriously and that the King believes Syria may be planning military action against Israel along with Egypt. Although Husayn would like to remain a spectator, he fears Jordan would be dragged into the fighting-if Syrian forces cross Jordan to attack Israel. 7 ( _j [Husayn is especially concerned right now about his relations with Damascus. He is afraid that President Asad will again close the Syrian border to commercial traffic and take other steps in conjunction with Cairo to isolate Jordan. At present, these worries seem exaggerated.? Husayn faces some real economic problems. Jordan is having its usual difficulties making ends meet and has been hit by one of the worst droughts in recent memory. Government spend- ing is threatening to spiral out of control. The defense budget alone is already as large as-and is growing faster than-total government revenues, excluding foreign aid. Husayn has shown no in- clination to apply the brakes In fact, his appetite for more and better military equipment seems to have grown since his return from Washington last March .7 boycott all US interests and it only stopped load- I.) IThe council of ministers has also failed to ing operations into oil tankers; pumping was not come to grips with the problem; indeed, the affected, and damage to oil company interests' ministers recently added to it by raising their own was minimal. Kuwait stopped loading operations 1t- salaries. Husayn is aware that the government is for one hour in what amounted to a symbolic drifting and that popular discontent with its "do- move~/no oil tankers were scheduled for loading nothing" policy is on the rise. on 15 May, and the Kuwaiti action had no tangi. ble effect. Despite the minimal damage and the failure of many large producers to take part in the boycott, the gesture, particularly on Kuwait's SECRET Page 13 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Ultimately, the Jordanians are likely to turn to the US to bail them out. ordanian hand wringing-although a reflection of genuine concern-is probably also intended to elicit assurances of continued US support. SECRET Page 14 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SECRET .. SUDAN: CRACKS IN THE SOUTH ' 6 )Fourteen months after the end of the southern rebellion, the facade of solidarity is beginning to crack. Old tribal animosities are re-emerging in the south and popular discon- tent is on the rise as a result of food short- ages, governmental inefficiency and corrup- tion. )At present, the unrest does not appear to pose a serious threat to the peace accord. Much of the dissatisfaction, in fact, is focused on southerners who run the regional govern- ment rather than on the north or President Numayri, whose personal popularity remains high. Numayri reportedly has considered a shake-up of the southern government, but a shake-up would involve him in the thankless task of trying to balance the myriad of con- flicting tribal interests. He may therefore leave it to the southerners to sort out their own problems unless civil unrest threatens to get out of hand. SECRET Page 15 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SECRET 1WW fPresident Allende's triip to the inauguration ~~.:copper complex is now in its second month. The of Argentine President Carnpora will give him a government refuses to negotiate, believing that welcome respite from problems at home. Under ,,the wage demands are excessive and prejudicial to Allende, economic and political relations with less-privileged workers. The struggle at El Ten- Chile's old adversary, Argentina, have substan- ' iente has its political ramifications, and leftist tially improved. He probably hopes the peronistas'.1 X extremists and Christian Democrats are both will be even easier to deal with than their military encouraging the strikers to hold out against the predecessors.? Communist labor and finance ministers. ?_ Allende left the outgoing foreign minister, Clodomiro Alme da, in charge of an unhappy and uneasy country r-Even sympathetic observers are appalled by the Chilean economy's downhill slide' and by the government's inability to deal with its ''?problems. Allende assumed some of the blame for the economic situation in a curiously low-key State of the Nation speech to the new congress this week; he announced no new economic meas- ures. Help from several countries such as Mexico, West Germany, and Czechoslovakia has been wel- 25X1 come, but is no more than a stopgap. Develop- ment Minister Vuskovic is almost certainly seek- ing more help during his current trip to Moscow, can while, the costly strike at the huge El Teniente El Teniente Mine Strike bound rr JAdditional serious strikes are threatened, and private bus owners stopped operations on 22 May. This could be the first move by Allende's opponents to combine business shutdowns with blue-collar labor disputes and winter-worsened shortages. They may hope to cause disruptions worse than those brought by last October's pro- longed shutdown. The goal, ultimately, is the downfall of a government they accuse of deliber- ately fostering economic disintegration as the quickest path to socialism and absolute power. It is true that the Allende administration's control of the economy has grown even as the economy had deteriorated. Economically inspired chal- lenges have often led to take-overs of the offend- ing enterprises. Since the military ministers re- signed in March, the cabinet has overruled the comptroller general's decision that many of the take-overs were illegal. Few of the businesses seized have been returned to their owners, and even fewer are efficiently run.( )Although the latest bus strike was immedi- ately effective in Santiago, the government ' promptly put the companies under control of an X army general. Thus, the government has public irritation over transportation shortages as well as the army working for it, SECRET Page 16 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SECRET t>( General Torrijos has taken a hand in shaking a new position paper on canal talks out of a recalcitrant Foreign Ministry. The statement of- fers a slight concession on the issue of duration-- Panama will now accept a treaty on the present canal running to the end of the century---but it holds fast to other Panamanian demands. The statement is generally moderate, and the Pana- manians have even referred to the "positive tone" of President Nixon's State of the World message- )'The new statement, which is in the form of a letter from Foreign Minister Tack to US Ambas- sador Anderson, retains Panama's insistence on blanket recognition of its full jurisdiction and effective sovereignty over all territory. This is a matter of principle, according to Tack, and agree- ment on it must precede discussion of the details of concessions that Panama would make to the US for the operation, maintenance, and "protec- tion of vital installations" of the canal(. JAll that f \ , Panama appears willing to negotiate is the sched- uling of US withdrawal.( 1(; [ Tack was even less accommodating on thei question of a new canal. He has announced that Panama has commissioned its own study of pos- sible routes and will use that study as the basis for deciding where any new canal will go. Tack ap- pears willing to allow the US to build a new canal for Panama, but only if Washington decides to do so quicklyl.''In the evens: the US were to build a new canal, Panama would retain full jurisdiction over all land and water areas and would prohibit foreign military bases. In any case, Tack has said Panama will not even discuss the subject until its route study is finished next yearl7 ;'fI Tack, who advocates a policy of confronta- tion, has presented this statement to Ambassador Anderson at General Torrijos' insistence. Torrijos and President Lakas have been anxious for the canal talks to resume, and they have discussed the appointment of a single negotiator as a means to that end. This method would bypass the Foreign Ministry, though it has not been demonstrated that such a negotiator would be able to go beyond Tack's new position paper. A broad interpretation of the "protection of vital installations" would offer limited prospects for satisfying US security interests, but there seems little basis for reconcili- ation between the US wish for long-term control of an interoceanic waterway and Panama's in- sistence on quickly obtaining full jurisdic- tion. SECRET 25X1 25X1 Page 17 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 SECRET ""' URUGUAY: WATCHFUL RESPITE 4i JA guarded calm has descended on Monte- video after a period of brinkmanship by the mili- tary and Blanco Party politicians over who should have the final word in government decisions.; The confrontation was provoked by a mili- ta/y demand that the congressional immunity of leftist Senator Enrique Erro be lifted so that he could be tried for collaborating with the once powerful Tupamaro guerrillas. Even though Erro has long been recognized as a public spokesman for the Tupamaros, the largest faction of the Blanco Party decided that the time had come to challenge the armed forces' encroachment into government., [The services stood firm in their request, ap arently because of growing concern in the ranks that the armed forces are losing the initia- tive gained in mid-February when they won a larger voice in running the government. As a show of military determination, about 1,000 troops were brow ht to the capital city during the con- frontation/ I; t )After weeks of jockeying, a showdown was averted when the Senate declared itself incom- petent to decide Erro's fate, and left it open for the Chamber of Deputies to begin impeachment proceedings against him. Some senior military officers may have supported the Senate's move. Others believe that in accepting it the military is compromising with discredited politicians and permitting an erosion in the military's new-found prestige. Their criticism may be tempered by recognition that the vote is likely to go their way now that the issue has been reduced from a contest for power between the military and the congress to an issue of guilt or innocence of an individual senatorf "='/ IThe more important issue of who is to con- trol the government remains undecided and unless an effective dialogue is established between the military and congress there are likely to be uglier SECRET Page 18 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Jtuht:I qw, i 1) ]President Banzer's government has been shaken by the death of an accused coup plotter, and it will be difficult for the President to rebuild the carefully nurtured facade of unity and tran- quility within the government coalition;] The initial announcement of the arrest and accidental" death of Colonel Andres Selich was e problem enough. He was publicly charged with i4 heading a coup group composed of military of- ficers, dissident members of the right-wing Bolivian Socialist Falange, and other exiles. The far-rightist coloration of the group was enough to confirm the worst fears of many members of the moderate leftist Nationalist Revolutionar Move- Y ment that the conservatives were out to grab I)! INow that it is public knowledge that some power for themselves alone. When Interior Min- 4 rightists were scheming to seize power, the mod- ister Arce later admitted that Selich had died erate leftists in the government can be expected from a police beating and named the allegedlyi/?%to increase their own discussions about their guilty parties, it was time for the right to squirm, future. The top leaders of the parties may still go as they controlled the ministry until recently l through the motions of claiming unity, but their juniors, never enthusiastic about the "oil-and- water" coalition in the first place, will be even )16 [The Falange leaders voted to leave the gov- less so now. The military probably will grow more ernment if Arce was not fired as minister, and the dissatisfied with both political parties./ armed forces commander publicly expressed the "consternation" of the military. Banzer had little ~,'~choice but to remove Arce, and a military man NV /The press and some politicians are already was named to replace hirn. The President is furi- y calling for a public examination of what they ous with military leaders for expressing an inde-believe to be other skeletons in Banzer's closet. endent stand Anything but the most limited investigation into Rumors of Selich's death could easily snowball, with un re- Banzer's imminent resignation or replacement by dictable results for the overnment. a junta have been denied SECRET Page 19 WEEKLY SUMMARY 25 May 73 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 INTERNATIONAL MONEY The dollar, under pressure again on 21 May, has strengthened somewhat since. ? Since 7 May, when the dollar was at its strongest level in recent months, it has depre- ciated by about 3.5 percent against the Euro- pean joint float currencies; ? The free market gold price peaked Mon- day at $112 an ounce, up $22 since May 7, but it has since fallen off slightly. The absence of intervention by the European central banks apparently has reduced the volume of trading on the currency exchanges, but has resulted in sharper movements in exchange rates. The major impetus for the wave of dollar selling last week could have come from a number of quarters. US banks, multinational corporations, and Middle East interests have been cited by one source or another as the largest sellers. The European joint float initiated on 19 March has easily weathered the storm on the currency markets. The floating currencies are all strong relative to the dollar, and only modest Exchange Rate Changes Since 19 March (in percent) interventions have been required to maintain the band. If the dollar continues to depreciate, how- ever, substantial interventions could become necessary and internal pressures on the European joint float would increase. Strong differential pressures among the cur- rencies would mean that member nations would have to choose among even greater interventions to maintain the band, dropping out of the band, or adjustment within the band. According to EC officials, if an EC currency were to come under strong pressure and if the necessary credits and support were not forthcoming, exchange rate ad- justments within the band would be more likely than a withdrawal from the float. This solution probably would be acceptable to Sweden and Norway, whose currencies have been the strongest in the joint float, but not to Bonn, which prob- ably would prefer to float the mark independ- ently rather than resort to still another revalua- tion. Despite the rapid appreciation of the mark in recent weeks, it remains at the bottom of the band and thus has more room for further appreci- ation than other currencies in the joint 7 May 15 May 21 May 23 May Mark -0.9 +2.0 +3.1 +2.8 Guilder -2.1 +1.0 +2.0 +1.9 French Franc -0.4 +2.6 +3.4 +2.9 Sterling* +1.3 +4.3 +4.5 +3.9 Swiss Franc* 0.C) +3.4 +4.9 +5.0 Yen* -0.3 +0.5 +0.2 +0.7 SECRET Page 20 WEEKLY SUMMARY Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6 Secret Secret Approved For Release 2007/11/15: CIA-RDP79-00927A010300030001-6