WEEKLY SUMMARY

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Weekly Summary
Navy review
completed.
State Dept. review
completed
Secret
Secret
7 September 1973
No. 0386/73
Copy N2
42
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The WEEKLY SUMMARY, issued every Friday morning by
the Office of Current intelligence, reports and analyzes signi-
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 Strategi-.
Research, and the Directorate of Science and Technolocl=,
Topics requiring more comprehensive treatment and ther-
fore published separately as Special Reports are listed in 1 t
contents.
WARNING
The WEEKLY SUMMARY contains classified informa`io
affecting the national security of the United States, with; -
the meaning of Title 18, sections 793 and 794, of the I.,t..
Code, as amended. its transmission or revelation of its car
tents to or!receiptby an unauthorized person is prohibited b=;'
law.
1 China: The Path of Least Resistance
3 USSR: Defense; Dealing with Dissidents
6 Trade Talks To Open in Tokyo
Blow at Inflation
12 China: Flaying the Soviets
10 Japan:
7 Indochina
9 Korea: The Kim Affair
15 Libya: Oil as a Weapon
15 Israel: Bellwether Election
16 Sudan: The Students Are Restive
17 Greece: Choosing a Premier
17 USSR: Aid to Sana
18 Argentina: A Balancing Act
19 Bolivia: Seeds of Discontent
20 Haiti: Fire Alarm
21 Colombia: Election Rumbles
22 USSR: Damaged Submarine
25X6
25X6
SPECIAL
REPORT (Published separately)
CONTENTS (7 September 1973)
EAST ASIA
PACIFIC
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
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 Wang Hung-wen, Mao, and Chou En-lai at party congress
China: The Path of Least Resistance
( rA spirit of trying to accommodate everyone
and antagonize no one seemed to pervade the
Tenth Party Congress. The new Politburo, for
example, includes two newcomers who rose to
prominence during the Cultural Revolution and
two who were targets of that upheaval. In keeping
with this spirit, some contentious longer range
issues were avoided, and many big questions were
left unanswered.]
I [The succession question has been uppermost
in the minds of China's leaders since the fall of
Mao's chosen heir Lin Piao, but the congress-
possibly Mao's last-did not spell out a formal
succession scheme. The party did elect five vice
chairmen who presumably would serve as a collec-
tive leadership when Mao dies, but the new party
constitution did not designate them specifically as
successors. Recognizing that the issue deserved
some sort of treatment, the congress communique
2 boasted that the party had "no lack of suc-
cessors," and the new constitution spoke of train-
ing successors in the "millions."?
I JThe key question of the military's role in
politics also received no definitive solution. In his
Page 1
political report, Chou En-lai praised the achieve-
ments of the military during and since the Cul-
tural Revolution, but this was the closest the
speakers apparently came to dealing with the
issue. The party did arrange a significant, though
smaller, military representation in its key coun-
cils. Most of the military men on the Central
Committee and Politburo who were tainted in the
Lin Piao affair were replaced by civilians. The
remaining military men-four on the 25-man
Politburo and more than 70 on the 319-man
Central Committee-were in most cases returned
to these positions. The numerical civilian-military
balance has shifted to the civilian side)
f The congress neither endorsed nor con-
demned the liberal trend in domestic politics that
has accelerated since Lin Piao's fall. Even as the
congress met, the media were attacking many
moderate policies, but Chou En-lai's political re-
port-often in the past usedits a vehicle to pro-
claim policy successes-sidestepped these contro-
versies. Chou noted only that the economy was
"doing well," that there were "many great
achievements" in other areas, and that rules and
regulations must be followed. The new
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constitution urges party members to "dare to go
against the tide," a Chinese euphemism for oppos-
ing erroneous tendencies. Without firm policy
guidance from the congress, however, party cadre
j do not know whether they are to oppose the
current moderate policies or to oppose those who
are critical of these policies. The opaqueness of
the constitution on this score is an acknowledg-
ment that proponents of almost all points of view
still have some maneuvering room.?
tone policy attacked just before the congress
was the rehabilitation of officials ousted during
the Cultural Revolution. The congress elected
some 20 rehabilitated cadre to the new Central
Committee, but none of the four who sat on the
Politburo before the Cultural Revolution was re-
turned to that body. The documents from the
congress indicate that there is room in the party
for these veteran officials, but fail to define the
role they will be allowed to plaArChou warned
them that party members must be willing to ac-
cept "higher or lower posts.' 7
I `The upper reaches of the party are indeed a
combination of old, young, and middle-aged offi-
cials. Although they may be able to work to-
whose agreement Chou needs on questions of
policy'?
TQn foreign policy, the congress reaffirmed in
ptro g terms the basic anti-Soviet impulse and
pragmatic directions of Chinese foreign policy.
2. Congress documents branded the USSR the chief
threat to Chinese security and indicated that
Chinese openings to the US and to Japan stem
from this essential fact
Thou En-lai charted a policy aimed at con-
&, taining Moscow. Under the rubric of opposing
superpower domination, Chou invited Third
World, Communist, and industrialized states alike
to join Peking in curbing Moscow's ambitions.
The congress left scant room for Sino-Soviet re-
conciliation, despite Chou's ritualistic call for im-
proved state relations and a negotiated settlement
to the boundary dispute. Chou specifically raised
the possibility of a surprise Soviet attack against
China, but he seemed less alarmed about this
prospect than was apparent at the Ninth Congress
in 1969.7
tin striking contrast to the Ninth Congress,
Chou advanced hardly any direct criticism of
Washington's foreign policy. He compared US for-
eign policy favorably with that of Moscow and
stressed points of Soviet-American contention ra-
ther than collusion. In effect, Chou seemed to be
subtly building a rationale that more normal Sino-
American relations are in Pekinl.s security inter-
est and not ideologically harmful.[
l! FChou's direct references to Sino-American
normalization and to Washington's policy were
closely measured. He went no further than to say
that Peking's ties with Washington had "improved
somewhat" since 1969--a vast understatement in
light of the distance the relationship has actually
travelled. Nowhere did Chou employ the term
"Mao's revolutionary foreign policy," which here-
tofore had frequently been used to indicate high-
level endorsement of important policies. Chou's
remarks differed in tone, though not in substance,
from the foreign policy section of Wang Hung-
wen's report on the party constitution. Wang
seemed harder on the US, indicating that both
Washington and Moscow posed threats to Chinese
gether as a group, some differences in approachi"'
surfaced at the con
Hun
-wen
the -
ress
Wan
g
,
,L
g
.
g
young Shanghai official elected a party vice chair-
man, gave a speech to the congress in which he
expressed great faith in the Maoist principle that
constant ideological struggle will keep the party
pure. He saw upheavals on the scale of the Cul-
tural Revolution as a useful tool in the future.
4" Chou En-lai, while paying lip service to some of
these notions, seemed more concerned with the
practical question of how to reconcile such strug-
gles with orderly, unified progress.'
s the number two man in the party, Chou
spec s with somewhat more authority than the
others. Nonetheless, one of the most significant
actions of the congress was the elevation of at
least two men to the standing committee who
now must be consulted on major decisions. They
are Li Te-sheng, a military man who is a party
vice chairman, and Shanghai party boss Chang
Chun-chiao, a member of the Standing Commit-
tee and perhaps the party's de facto secretary
general. Thus, Mao is no longer the only leader
4-
l
security.
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USSR
1(s
Institutional factors within the Soviet military
and defense industries will give added impetus to
these and other programs and will preclude any
sharp cutbacks. Indeed, the trend for the remain-
der of the 1970s is likely to be a repeat of the
upswing in spending in the 1960s.
Soviet defense spending has followed a gen-
erally upward trend since 1960, increasing at an
average annual rate of about 3 percent; it was 17
billion rubles a year at the beginning of the period
and about 24 billion last year. The principal
causes for this rise have been the rapid growth in
outlays for space and military research and devel-
opment as well as the steady rise in the costs of
operating Soviet military forces.
For the last three years spending has hovered
around the 24 billion ruble level, but a new surge
in spending is likely as the Soviets enter into a
new investment cycle for strategic systems. Mod-
ernization of the strategic missile force, continu-
ing outlays for new sea-based ballistic missiles,
and the introduction of new aircraft are some of
the major programs that will boost spending.
aliacu unu mmiery n & u
p ___ 1-1 I I I I 1 1
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
554582 9-73 CIA
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Spending for the individual services is likely
to follow patterns developed since 1960. Outlays
for the ground forces are expected to remain
stable. Spending on the navy will show a slow but
steady growth resulting from continuing invest-
ment programs. The upward trend in spending for
the air forces, which began about 1970, will con-
tinue as new tactical aircraft and the Backfire
bomber are introduced. Expenditures for the stra-
tegic rocket forces-now at their lowest level-
Estimated Soviet Expenditures for Defense
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Expenditures for space and military re-
search and development will continue to be the
fastest growing element of Soviet defense
spending.
Over the years the overall trend has been
upward, but there have been deviations. Heavy
spending on research and development coincides
with slack periods in the purchase of the actual
hardware. This reflects the full cycle of develop-
ment and procurement costs for major weapons
systems and suggests that investment in hardware
and military research and development compete
for some of the same resources. In addition, there
has been a long-term increase in the ratio of
research and development to investment, indi-
cating that this area now makes up a greater share
of the total acquisition cost of new weapon sys-
tems-a reflection of their increasing complexity.
Spending on the active military forces, ex-
cluding space and research and development, has
risen from about 14 billion rubles in 1960 to
about 16 billion in 1972. Such expenditures
throughout the period were also marked by dis-
tinct cycles and reflect Soviet priorities in force
development. Soviet ground forces received the
greatest share-some 25 percent of the total. The
remaining funds were distributed about equally
among the other four combat branches and a
residual category which includes rear services as
well as all command and support functions.
Investment in hardware, when considered by
itself, gives a different impression of priorities.
The difference is significant because this sort of
spending reveals the flow of new equipment and
technology to the forces. In these terms, the
strategic rocket forces clearly stand out, account-
ing for some 25 percent of investment spending
since 1960. Investment expenditures for the navy,
cumulatively some 20 percent of the total, and
for the ground forces, about 18 percent, were
generally stable over the 12 years. The patterns of
investment spending for the air forces-about 17
percent since 1960-and for the air defense
farces-14 percent-have been countercyclical
with respect to each other. When investment for
one has risen, investment for the other has fallen,
reflecting the competition of these forces for
aircraft.
A reliable allocation of military research and
development expenditures among the services
cannot be determined from available data, but
general assessments can be made. Most Soviet
military research and development expenditures
are for advanced weapon systems using high levels
of technology in fields such as electronics, propul-
sion, and nuclear armaments. The largest consum-
ers of such technology are the strategic rocket
and air defense forces. Thus, their share of total
defense spending including research and develop-
ment would be much higher and grow faster than
indicated by the trend of spending for procure-
ment and operation of the forces.
Soviet defense expenditures have enabled
the USSR to close the gap with the US in strate-
gic forces and at the same time improve Soviet
conventional forces. These achievements have
been expensive, and Soviet leaders are sensitive to
such costs. They are aware of the heavy impact of
military requirements on the technological re-
sources needed to modernize the Soviet economy
and are more aware of consumer demands than in
the past. Nonetheless, the Soviets apparently be-
lieve that the economy is generally healthy and
capable of sustaining or even accelerating the pace
of defense spending. Thus, economic con-
siderations alone will not prevent them from
undertaking the military programs they deem
necessary?
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DEALING WITH DISSIDENTS ( -?)
(Soviet authorities are slowly tightening the
ring around dissidents Andrey Sakharov and
Aleksandr Solzhenitsyn. The trial of Petr Yakir
and Viktor Krasin last week indicated that
Sakharov and Solzhenitsyn may be the next
targets. Yakir and Krasin reportedly gave testi-
mony implicating the two men, and the press
mounted a letter-writing campaign against them.
It would be difficult for Moscow to back off now,
particularly in the case of Sakharov.
The Soviet press charges that Sakharov's op-
position to detente supplies anti-detente elements
in the West with ammunition. This argument is
probably designed to appeal to intellectuals who
otherwise would not lend their support to an
attack on Sakharov. Significantly, signers of
letters denouncing Sakharov included not only
conservatives but also moderates such as novelist
Boris Polevoy and social scientist Aleksey M.
Rumyantsev. Besides preparing the ground for an
attack on Sakharov, the letter-writing drive
against Sakharov is being used to extract clear
expressions of support from the intelligentsia.
Only two Soviet intellectuals have publicly
defended Sakharov. Both are dissident scientists.
Physicist Valery Turchin attempted to reverse the
official argument, by maintaining that it was the
"hysterical campaign" against Sakharov that was
undermining the basis for detente. The spirited
defense offered by Academy of Science member
Igor Shafarevitch is perhaps more important,
since there has been speculation that Moscow
may press for Sakharov's expulsion from the
academy. Another prominent Academy of
Science member, Petr Kapitsa, reportedly resisted
heavy official pressure in refusing to join 40 acad-
emy members who signed a letter criticizing
Sakharov.
While the authorities have largely succeeded
in isolating Sakharov and Solzhenitsyn at home,
the attacks on them have touched off a barrage of
Page 5
Solzhenitsyn
criticism from the outside world. This has in-
cluded criticism from Western Communists, and
Moscow finds such barbs harder to handle than
the outcry in the non-Communist media. For
example, Pierre Daix, an outspoken member of
the French Communist Party's secretariat, created
quite a stir in the French party by denouncing
neo-Stalinist persecutions in the Soviet Union.
Last week, the Italian party organ registered
cautious disapproval of the way Moscow was
handling the Solzhenitsyn affair.
The US Embassy in Moscow reports that
dissidents, believing that "the worse the better,"
are now convinced that Moscow's drive to crush
dissent is backfiring. It may be that the reaction
by Sakharov and Solzhenitsyn to the moves
against them was stronger than the authorities
had bargained for. They have refused to follow
the regime's dictates and have shown a dogged
determination to make their plight known to the
West. Sakharov's defiance of official warnings will
probably make it necessary for the regime to
follow through with more drastic measures to
silence him, even at the cost of damaging Mos-
cow's international reputation and demoralizing
some Western Communists. The press attacks on
Sakharov have been more strident than those
against Solzhenitsyn, and the publicity given to
the former's sins makes it difficult for the regime
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Trade Talks To Open in Tokyo
yIThe Tokyo ministerial meetings of 14
September, formally opening the multilateral
trade negotiations, will be devoted largely to cere-
monial speeches and obtaining agreement on the
wording of the joint declaration. Debate in Tokyo
will center on the nature of the link between
trade and monetary reform and on the interests
of the developing countries. Negotiations on
specific issues will not begin until November, and
real bargaining will be delayed until major partici-
pants develop their negotiating positions.
The US will face strong resistance in pursuit
of its objectives. Many governments prefer only
limited trade reform. They are willing to see some
reduction in tariffs and in non-tariff barriers, but
not a major change in rules and procedures under
the General Agreement on Tariffs and Trade. The
EC clearly does not want the trade talks to dilute
the impact of EC enlargement and development.
The community's tough stance reflects wariness
about US intentions as well as uncertainty about
the ultimate extent of the US negotiating author-
ity. The elements for US-EC confrontation exist,
but efforts are under way to soften differences
over the trade-monetary link. In addition, the
growing likelihood of the less developed countries
making presentations hostile to the interests of
industrialized countries will help unify the nego-
tiators from the developed countries at Tokyo.
Within the framework of the EC's overall
position, each member has its own particular in-
terests to protect. All agree on the need for
reciprocity in trade concessions and inviolability
of EC institutions. All oppose the US goal of
completely removing tariffs on industrial goods
and favor international commodity agreements.
Differences among community members center
on the relationship between the trade negotia-
tions and monetary reform, on the role of agricul-
ture in the negotiations, and on trade preferences
for less-developed countries. The Germans, Brit-
ish, and Danes are more sympathetic to US inter-
ests than are the French, who fear that US posi-
tions will weaken the EC's common agricultural
policy and other elements of European inte-
gration.
The developing countries will be conten-
tious. They are concerned that the negotiations
will damage their trade with developed nations or
inhibit the future growth of that trade. Many
disagreements naturally exist among the devel-
oping nations, reflecting differences in stages of
development and in degrees of militancy. These
differences have resulted in the emergence of vari-
ous blocs which should reduce their effectiveness.
The Latin Americans, through the Special
Coordinating Commission for Latin America, will
present a regional position which calls for:
? expansion of generalized preferences for
developing countries' exports;
? allocation of special benefits for the
least developed so long as this does not prej-
udice the interest of other developing coun-
tries;
? application of non-reciprocity in nego-
tiations between developed and developing
countries.
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None of the Latin American participants was
completely satisfied with the regional position.
Mexico indicated that the commission had been
too passive in accommodating the interests of the
least developed countries. Brazil, on the other
hand, wanted the group to develop a strong nego-
tiating position on market access for developing
countries' agricultural products and on the elimi-
nation of tariff differentials between processed
and unprocessed products. Chile and Peru, along
with Cuba, which is not a member of the Latin
American group, are the most vociferous in ad-
vancing what they see as the developing nations'
CAMBODIA: STATE OF SIEGE (I)
The Khmer Communists are pushing hard to
gain control over Kompong Cham, the country's
third largest city. The situation at the isolated
northern provincial capital has deteriorated
rapidly since the insurgent offensive was launched
on 31 August. Although the government has air-
lifted reinforcements to the threatened city and
provided additional air and artillery support, sus-
tained ground and artillery attacks have forced
Cambodian Army troops to fall back from out-
lying positions. At midweek, the situation had
reached a critical stage as some Communist ele-
ments had infiltrated sections of the city itself
and fighting was reported in the central market-
place.
In the Phnorn Penh area, the insurgents re-
turned to the attack along Route 4 and gained
control over a short section of that vital highway,
15 miles west of the city. Elements of the Cam-
bodian Army 1st Division, backed by armored
vehicles and artillery, have so far been unable to
reopen the road. Fighting also picked up south of
Phnom Penh, where units of the 3rd Division
continued their seesaw struggle with the insur-
gents for control over a short stretch of Route
201. So far the insurgents have been contained in
this sector and have not been able to breach
Phnom Penh's southern defense line.
his efforts to isolate the Lon Nol government in
the international community. In a spate of inter-
views before leaving Peking, Sihanouk reaffirmed
his refusal to negotiate, promised to fight until
"total liberation," and denounced would-be
mediators. He also stated that the Chinese would
foot the bill for renewed North Vietnamese arms
shipments to the Khmer insurgents, and repeated
that the arms would come from Viet Cong stocks
in South Vietnam. He asserted that these arrange-
merits would not violate the armistice.
Although the Lon Nol government is re-
signed to coming off second best at Algiers, it did
not leave the field entirely to Sihanouk. In his
first press conference since January, Lon Nol re-
buked Sihanouk for his collaboration with the
Vietnamese Communists and his claim that he is
Kompong'
Chhnang
Heavy
7 fighting
rrtinues>
PHNOM PENH
\ f
4
Sihanouk On Stage
The peripatetic Prince Sihanouk arrived in
Algiers early in the week to attend the nonaligned
summit conference, which he hopes will support
Ang
3
Snuol \\
1
Kompong Chart
20
insfrgent
$e intel\diction
se
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Prey Veng
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struggling to make Cambodia a Communist country. industrial enterprises put back into operation. He
Lon Nol also left the impression that negotiations acknowledged, however, that long-term economic
were no longer of vital interest to the government, planning for the country was still in the "thinking"
As for his own situation, the Cambodian leader said stage?lNational Day pronouncements from North
that he has no plans to leave the country') /'S Vietnam tend to be laden with more platitudes than
It
1 0 )Prime Minister Souvanna Phouma is still locked
in a struggle with his rightist critics over the proto-
col he worked out with the Lao Communists. In a
press conference early in the week, Souvanna again
threatened to resign if rightist approval was not
forthcoming. He singled out Transportation Minister
Ngon Sananikone and Finance Minister Sisouk na
Champassak as the leading obstructionists. Souvanna
did not criticize leading Lao Army officerstnost of
whom have voiced varying degrees of opposition to
the draft protocol. Souvanna's failure to cite the
generals suggests that he may be having some success
in isolating his civilian opponents from their allies at
senior levels of the army. Lao Army Commander in
1!
Chief General Bounpone recently ordered units
from south Laos into Vientiane to protect Souvanna
from posiJ ble rash reactions from the less rational
rightistslJAlthough some cracks are appearing in
rightist ranks, it may take more time before Sou-
vanna feels that the diehards have been sufficiently
isolated to permit him to sign the agreement)
1 he Communists continue to complain about
the delay and are holding the rightists personally
responsible. In a press conference on 4 September
chief Communist negotiator Phoumi Vongvichit
lambasted the Sananikone clan for its foot-dragging
and asserted that the US could pressure them into
bowing to Souvanna's demands if it were willing to
try -7
VIETNAM: RECONSTRUCTION STILL FIRST
1 2 )Premier Pham Van Dong's national day speech
reaffirmed Hanoi's commitment to the cease-fire
agreement and the economic reconstruction of the
North. Dong pledged Communist implementation of
the Paris Agreement, and warned that his people
would continue their struggle until the "other side"
fully implements the agreement.
a-Lf The Premier said that since the cease-fire, rail
and highway routes have been repaired and many
is
usual, and Dong s speech was no exception.
noteworthy, however, that the Premier restated
standard North Vietnamese positions in the wake of
recent articles in the army daily advocating a more
aggressive military line in the South'
A Less Vigorous ICCS
14 The communists are laying the groundwork for
a reduction in the role of the International Commis-
sion for Control and Supervision. Hanoi and the
Viet Cong have sent diplomatic notes to the mem-
bers of the group proposing a cutback in personnel.
Some of the language suggests that the Communists
may also be considering the elimination of regional
and loc l truce teams, leaving only a headquarters in
Saigon.!
)The Communists have always held that the
International Commission should be basically a
mediating rather than an investigative body and have
been pushing for a reduction in its activities almost
since it was established. The new proposals do not
necessarily indicate that Hanoi plans a big step-up in
its military or political activity in the countryside,
but it does suggest that the Communists find the
presence of cease-fire teams throughout the country
politically and psychologically inhibiting
Ir, )The Communists probably would like to do the
reshaping before the new Iranian team gets estab-
lished and will use the commission's recurrent finan-
cial difficulties to back up their arguments that its
activities should be curtailed'
/5 (Even if this Communist pressure fails, the com-
mission is not likely to be as vigorous as it was
before Canada's departure. The Iranians will prob-
ably play a more passive role than the Canadians,
and in any case it will take them some time to get
adjusted. There is no indication that the Communist
members, Poland and Hungary, intend to be any
more cooperative than in the past, although Poland
has sto ed su estin that i t mi ht with-
draw.
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is encouraging some Japanese industries, including
steel, to restrain exports and boost purchases
from abroad.
Tokyo's effort to control price increases has
been complicated by a number of other factors.
Trade and industrial firms have plenty of money,
and this has reduced their normally heavy de-
pendence on bank credit. Because profits have
been rising rapidly, these firms have built up
larger cash holdings than usual. Moreover, much
of the increase in wholesale prices this year stems
directly from the sharp increase in world market
prices of foodstuffs and raw materials which
mane up a large share of Japan's imports.
The government's latest measures should
cool the economy a bit for the rest of 1973. A
few signs that domestic demand has begun to
slacken have already appeared. Gross national
product, for example, grew at a slower pace in the
second quarter of 1973 than in the first quarter;
land prices have begun to decline; and bank
deposits posted a slight decline in July, the first
July decline in 12 years. Nevertheless, the rate of
price increases will slow only gradually during the
A BLOW AT INFLATION
NG S cttArcff
TTokyo this week' introduced a new series of
measures to combat inflation. Some $2.5 billion
in planned government spending will be post-
poned until April 1974. Consumer credit terms
are being tightened, and the government is
moving to encourage major industries to postpone
outlays for plant and equipment. These steps
complement the hike last week in the ceirtral
bank discount rate to 7 percent and the increase
in commercial bank reserve requirements.
Tokyo began its anti-inflationary moves in
early 1973, but the impact has been limited so
far. In fact, wholesale prices jumped 2 percent in
July to more than 15 percent above the July
1972 level. Price increases have been fueled by a
surge in private investment coupled with a con-
tinued high level of government spending. At the
same time, some Japanese industries are having
trouble increasing output because they are reach-
ing their capacity. To cope with shortages, Tokyo
Page 11
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CHINA: FLAYING THE SOVIETS
2$ ~C hou En-lai's strident attack on Moscow at
the Tenth Party Congress took place against a
background of an intensifying war of words be-
I' tween China and the Soviet Union. With the
Chinese Congress clearly in mind, Moscow in-
itiated a new round of polemics in mid-July
27which included an authoritative speech by Brezh-
nev and a carefully orchestrated campaign from
most of Moscow's client states in East Europe)
4-4 the Chinese response has concentrated on
discrediting Soviet efforts to portray Moscow as
1.Lr12
favoring disarmament and opposing the use of
force in international relations. An NCNA article
commemorating the Soviet invasion of Czechoslo-
vakia, for example, stressed pointedly that Mos-
cow still had not renounced the "hegemonic"
policy that led to the invasion and the internal
purges which followed. Peking also chose the day
after the anniversary of the Czechoslovakia in-
vasion to sign its first formal agreement in the
disarmament field, the treaty for the prohibition
of nuclear weapons in Latin America, and pointed
to the fact that the USSR remained the only
nuclear power that had not accepted the treaty?
,&? FAIT of this was followed closely by a long
NCNA article on 25 August which was the most
waspish attack on the Soviets in perhaps two
years. In developing the theme that the present
leaders of the USSR are "new Czars" pursuing the
"aggressive and expansionist nature of great
Russian chauvinism and imperialism," the article
came very close to a racist analysis of Soviet
foreign policy. Chou himself developed a similar
theme, using even harsher language, at the con-
gress, charging that the USSR was a "fascist dicta-
torship" engaged in an aggressive, militaristic
policy worthy of a "new Czar.''
%-? tone week after the conclusion of the con-
gress, Izvestia published some of the congress
documents and charged that they confirmed the
"anti-socialist character" of the policies of the
Chinese leadership. Authoritative Soviet comment
on the congress has been minimal thus far, with
Soviet media relying on foreign commentary, par-
ticularly from East European allies.
They noted that the
anti-Soviet aspects of the meetings were not as
bad as could be expected, and they went out of
their way to argue that the Chinese communique
had blasted both the US and the USSR.
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30 rchancellor Willy Brandt's governing coali-
tion is vexed by a number of problems which
could become big headaches, but the opposition
Christian Democrats may not have much luck in
their avowed aim of making this a "hot autumn"
for Brandt'
33 `Internationally, Brandt's Ostpolitik has
stalled; the most recent evidence was provided by
the postponement of his symbolic visit to Prague
where he was to have signed a draft Czechoslovak -
West German treaty. Further, State Secretary
Frank's recent visit to France appears to have
done little to ease the irritations between Bonn
and Paris.'
n the economic front, prices continue to
clim' , though the public has shown remarkably
little concern. The rash of wildcat strikes and
riots instigated by radicals, however, has threat-
ened the delicate balance between workers and
industry. The fact that some of the agitators are
members of Brandt's own Social Democratic
Party has brought new tension to the party and
strained relations with its coalition partner, the
Free Democratic Party. The situation looks bad
enough so that the Chancellor has made a number
of public statements urging restraint and mutual
respect; on 4 September Brandt sharply attacked
the Young Socialists, stating that their support of
the :strikes was detrimental to the Social Demo-
crats'
3 On spite of Brandt's troubles, there is a ques-
tion whether the Christian Democrats are in a
position to exploit Brandt's problems effectively.
The Christian Democrats are calling Brandt a neu-
tralist and decrying his internal economic policies,
but thus far the Christian Democrats have not
been able to offer the voters specific alternatives
to government programs. Nor have the Christian
Democrats succeeded in arousing widespread
public dissatisfaction with Brandt's leadership.
Unless the Christian Democrats do better, most
Germans will probably remain willing to allow
Brandt to deal with the country's prob-
Page 13
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LIBYA: OIL AS A WEAPON
room Court
Libya's nationalizati of five ajor oil
companies on 1 September will almost certainly
lead to a confrontation with the companies, but
will not cause any significant supply problems for
the US. The five companies-Exxon, Standard Oil
(California), Texaco, Mobil, and Royal Dutch
Shell-are faced with either accepting 51-percent
Libyan ownership or being taken over com-
pletely. The companies produce about 700,000
barrels per day, about 30 percent of current
Libyan production, and export about 75 percent
of this to Western Europe. The companies export
to the US (both directly and indirectly from
foreign refineries) about 130,000 barrels per day.
This constitutes only about 2 percent of US oil
imports.
Acceptance of Tripoli's terms, which include
compensation for the companies' assets at net
book value-a low valuation method-and selling
government oil back to the companies at the
market price, would lead to new demands from
Persian Gulf oil producers. The companies will
not wish to see Libya's terms spread to the Per-
sian Gulf, and they will probably withdraw from
Libya, threatening legal action against the sale of
oil from the seized properties.
Even if the companies succeed in blocking
the sale of such oil, Libyan officials have indi-
cated that they would increase production from
fields already under their control through pre-
vious nationalizations and recent agreements with
Occidental, Continental, Amerada-Hess, and the
Italian State oil company ENI. Surplus produc-
tion capacity in oilfields operated by these com-
panies is nearly 700,000 barrels per day and,
given the extremely tight market for low-sulphur
oil, the Libyans should encounter no difficulties
in increasing their sales.
Recent press reports stating that Tripoli had
raised the price of its oil to $6 per barrel and
would reject payments in dollars are in error.
According to the text of Prime Minister Jallud's
press conference broadcast by Tripoli Radio on 2
Page 15
September, Jallud discussed the price of oil and
oil payment in dollars, but did not explicitly
refuse to sell oil for dollars or mention a $6 per
barrel price. He did, however, enumerate the
problems of holding reserves in currencies of un-
certain future value and pointed to the Organiza-
tion of Petroleum Exporting Countries as possibly
being able to find a solution.
ISRAEL: BELLWETHER ELECTION
(LIstY6)
JFHistadrut, the giant labor ederation, olds
its Election on 11 September for some 1,500
delegates who in turn will choose, at a convention
in December, the federation's governing bodies
for the next four years. As usual, this election,
which is always held immediately prior tothe par-
liamentary election, will be scrutinized carefully
to detect any trends that might be applicable to
the cleneral election on 30 October.
Histadrut, often called a "state within a
state," includes in its ranks some 90 percent of
organized Israeli labor. The organization also
owns and operates commercial and service enter-
prises and welfare activities such as the main
Israeli health service. Members of Mrs. Meir's
Labor Alignment won 62 percent of the Histadrut
vote in 1969; the Alignment is in solid control
and s certain to remain so. Its nearest competitor
is the right-wing, annexationist-minded Gahal
bloc which won 17 percent of the Histadrut vote
in 1969. Nine other parties shared the remaining
21 percent, with the largest of them getting 6
percent. The same proportional representation
system is used in the Histadrut as in the Knesset
elect ons, and this year 13 parties have filed.
The Histadrut elections are a somewhat de-
fective barometer of Israeli elections, however,
because the Hisadrut issues are primarily eco-
nomic, not all parties participate, and the elector-
ate is restricted to the 1.2 million dues-paying
members. Some Israeli voters, moreover, use the
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Histadrut elections to vent their irritation with
government policies by voting against the Labor-
ites, but then heed party discipline in the Knesset
election when their vote really counts.
that a strike would begin this week unless the
schools were reopened, arrested demonstrators re-
leased, the army returned to the barracks, and
other security measures rescinded. The union offi-
cials, who were promptly arrested, may not have
broad support among rank-and-file workers; if
they can pull off a general strike or a strike by
railway workers, they would create severe food
and fuel shortages and generate strong public crit-
icism of the government./
tion, s ri es, Income gap , g.
Alignment, however, has organized a virtual army 4/7 rn spite of general dissatisfaction over eco-
to get out the vote and is particularly anxious to nomic issues, Numayri's political opposition has
forestall any possibility of a groundswell for 4- thus far failed to attract wide support from the
Gahal and two allied parties that might carry over working class, the business establishment or the
into the Knesset elections. Such a groundswell 7-1 disaffected Ansar sect. With memories of the
does not seem likely, but the Labor Party was bloody coup of July 1971 still vivid, the general
careful to get a more activist program for the populace, although lukewarm toward the govern-
Mrs. Meir's Labor Alignment is working hard
this time to make a good showing in order not to
suffer another 15-percent drop as it did between
1965 and 1969. Party leaders laid that reverse to
complacency and low voter turnout. This year
there is considerable internal dissension over infla-
t U, s and housin The
Gahal.
occupied Arab territories on the books on 3 Sep-
SUDAN: THE STUDENTS ARE RESTIVE
meat, does not seem disposed toward a confron-
tation with the President at this time. From all
indications, Numayri continues to command the
loyalty of the army, the key instrument of power
nevertheless, the Muslim Brotherhood and
the eak but still active Communists are seeking
47 he government is trying to quell disorders ~- to discredit Numayri. They appear to have had a
in Khartoum that began with unruly student de- part in staging the well-organized student demon-
monstrations last week. The tense situation could strations. Muslim Brotherhood activists operating
become a major headache for President Numayri's on the campus of Khartoum University have been
Oregime if a threatened general strike materializes. a thorn in the government's side all summer.
Since May they have harangued student audiences
The authorities closed Khartoum University
and most other schools because of demonstra-
tions which were apparently abetted by the politi-
with inflammatory attacks against high prices,
food shortages, and unemploymentI
cal opposition. Clashes between students and 7 ('ever the past week the security forces have
police, plus the threat of a general strike, 1froun ed up a number of Communists and Muslim
prompted the government to declare a state of , Brothers as part of the effort to forestall further
emergency on 5 September. So far, three students incidents. Attacks on student demonstrators by
and one soldier have been killed. 94 bands of pro-Numayri youth groups, however,
provide agitators with another issue. Moreover,
the closing of schools puts on the streets students
The strike threat came from six union who could create further disturbances. The
leaders, including a representative of the key Rail- students may try to stage new demonstrations
way Workers Union. Acting in sympathy with the when Numayri returns this week from a lengthy
dissident students, they warned the government African tour.
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25X1
,$'l jA terse government announcement that Pres-
ident Papadopoulos and Spyros Markezinis had
found "complete agreement" during a recent
meeting suggests that the latter is the leading
candidate for prime minister in Greece' -
litical" cabinet since the 1967 coup.
Sa- IPapadopoulos' timetable reportedly calls for
the appointment of a new government, from
which most if not all of his coup colleagues will
be dropped, sometime in October1SCertain of the
3ministers in the present cabinet, particularly those
with a military background, are reluctant to leave
their positions. They enjoy no political following
and believe their present offices afford thug best
'means of keeping an eye on Papadopoulo32 one-
the less,
all present cabinet officers will resign in the next
few weeks. Should the military ministers continue
to resist, Papadopoulos could resign as premier at
S 3 any time and thereby necessitate their resignation
and the appointment of a new cabinet.?
53 ?Markezinis, who once led the small, right-of-
center Progressive Party, is at present the only
person known to be actively seeking the job of
prime minister. As the only party leader to avoid
open opposition to the junta, he is acceptable to
Papadopoulos. Markezinis may stand the best
chance of gaining the reluctant acquiescence of
those military elements who oppose resumption
of even the trappings of representative gov-
ernment`I
$'3 TThe Athens press almost certainly overstates
the degree of like-mindedness between Papa-
dopoulos and Markezinis. For example, the Presi-
dent probably will not accommodate Markezinis
in his demands that the promised elections in
1974 be freely conducted and that he be given a
significant role in handling foreign affairs.
Markezinis may be able to wield influence in the
economic and development areas, but hardly in
fl~the political arena, where Papadopoulos means to
25X1
keep tight control. At this time, Markezinis ap-
pears eager enough to gain the position to make
him willing to compromise.
USSR: AID TO SANA
S-S )
Moscow appears to have reC~ivated its small
military aid program in Yemen (Sana) after a
hiatus of some three years. The Soviets obviously
hope, that they can in this way wean Sana away
from too close a relationship with Saudi Arabia
and other Western-oriented countries. Relations
between Moscow and Sana deteriorated when the
Soviets failed to follow through on promises
made in late 1971 to supply new arms for Sana's
largely Soviet-equipped forces. The Yemeni Gov-
ernment also is irritated over Moscow's expanded
military assistance to Sana's long-standing adver-
saries across the border in Aden.
In early May a military delegation, led by
the commander of the Yemeni Army, went to
Moscow to discuss implementation of military
deliveries under the 1971 arms accord. He pressed
the Soviets to resume deliveries of vitally needed
spare parts. Reports indicate that Moscow agreed
to begin spare parts deliveries and to provide a
few jet fighters and helicopters. A contract also
was concluded for over 150 military trucks,
which are scheduled to arrive by late November.
Sana has announced that a group of military
students will be sent to the USSR. This appears to
be a response to Moscow's request that five
ground crew members of the Yemen Air Force be
trained on transport aircraft. These will be the
first military personnel from Sana to be trained in
the USSR since the hiatus began. Sana, on the
other hand, has not renewed contracts for Soviet
military advisers as their contracts have expired;
the number of advisers has dropped from over
100 in 1972 to probably less than 50 at present.
The Soviets have been involved primarily in the
maintenance of Soviet-supplied equipment and
25X1
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4o7 Puan Peron, after eliminating, or at least
diminishing, the leftist influence fostered by the
Campora administration, is now focusing on ways
to coax the rebellious left-wing youth contingent
of his movement to help elect him president later
this month. He cannot, however, go too far in this
direction without alienating the more conserva-
tive labor groups that constitute the base of his
power structure.'
absence to participate in the election campaign,
Lopez Rega was probably removed from the
scene as a sop to the younger Peronists who
consider Lopez Rega a "fascist" and "reaction-
ary." They believe him to be the architect of
efforts to rid the provisional government of leftist
influence and to be a schemer with presidential
ambitions.,
ls( tPeron may not, however, dispense with
q t'fhe first outward sign of Peron's latest shift Lopez Rega altogether. Lopez Rega has close ties
w
'
4'
as the departure from the government of his
with Isabel, and his appearance at Peron
s side
close aide, Lopez Rega. Ostensibly on a leave of during the review of a massive demonstration in
1 . I I 1
It
MMO
Peron rally advertisement
"Today as yesterday we-the Argentine Workers-close
ranks with the Leader"
U I support of the latter's candidacy last weekend
suggests that he retains his spot in Peron's inner
circle.?
there have been other signs recently that
Pero is moving to achieve a modus vivendi with
his left-wing critics. He agreed to meet with
leaders who represent the left-leaning Peronist
youth movement. Peronist youth also partici-
pated in the pro-Peron rally on 31 August, which
brought out a crowd estimated at 400,000-less
than the organizers had expected. Youthful
marchers provided much of t husiasm for
the generally peaceful turnout.
I -Some of the government's recent foreign
policy moves are also calculated to enhance
Peronist bona fides with the left. The extension
of a $200-million credit to Cuba and a
$10-million credit to Peru, for example, will be
popular with leftist youth since they demonstrate
Latin American solidarity through actions which
diminish "economic dependence" on the US.
Argentina has requested full membership in the
nonaligned countries' organization and the loan
may have been intended to improve Argentine
credentials7
VI rPeron is giving weight to his program for an
& independent foreign policy by making a strong
GG v .7
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pitch to the Chinese Communists. He made one to devote to the broader issues of Argentina's
of his infrequent forays outside his Buenos Aires foreign policy unless he can put his own house in
home to attend a recent Chinese trade exhibition, order. And that promises to be a substantial chal-
and he used the occasion to lavish praise on lengE! for the 77-year-old leader.
Chairman Mao. Argentina has agreed to conclude
a trade pact with the Chinese, and the terms are
apparently being worked out now. Peking has also
received the go-ahead to open an office of the
New China News Agency in Buenos Aires
G a Meanwhile, the Soviets have not passed up a
chance to get a first-hand reading of Peron's polit- 7ID if he coup attempt last month that involved
ical plans and his health. The USSR sent a fairly right-wing zealot Carlos Valverde, though a dismal
high-ranking delegation to the recent congress of 6' failure in itself, has revealed a spreading rot
3 the Argentine Communist Party. The delegates 7Zwithin the government of President Hugo Banzer7
had a 50-minute meeting with Peron, the first
41 direct Soviet contact with Peron since his return
`1from exile. In the 1940s the Argentine Commu-
nist Party was proscribed by Peron, and Soviet
media described him as a fascist dictator. The
Argentine Communists are planning to support
Peron in the coming elections.?
43 Moscow probably still has lingering doubts
about how Peron will act as a Third World spokes-
man. Reflecting this caution, Soviet media have
welcomed the recent political changes in Argen-
tina, but stopped short of praise for Peron or
Peronism. The Soviets did express to Peron-and
to the Argentine Foreign Ministry-interest in
providing some economic assistance.
To get a toe in the door,
the Soviets probably will offer concessionary pur-
chase terms as a form of economic aid.7
n any case, Peron is likely to continue pro-
jectirg the idea of the "two imperialisms" in an
effort to advance his claim to a leadership role in
the hemisphere and among Third World countries4
Romanian President Ceausescu's visit later this
month will give Peron an opportunity to elabo-
rate further on this theme. In the meantime,
Peron is likely to have less time than he might like
Page 19
72- showing the puritanical streak that runs through
70 (opposition from the extreme right was to be
expected since most of the threats to Banzer so
far have come from this quarter. The significance
of the Valverde plot is that it involved a number
of young military officers. These officers,
the new Bolivian middle class, are discontented
with the nepotism and self-seeking politics that
have characterized the second year of the Banzer
presidency. While not tied to any specific plot, a
number of important troop commanders share
these ideas
senior officers have attempted to write off
alpasition by their juniors by labeling them
"communists," but Banzer is troubled by the
growing rejection of his government within the
very institution that has gained the most from it.
Army leaders were concerned enough to place
their troops on alert last week and delay the
departure of their commander to the Caracas
meeting. Several air force officers took refuge in
the Paraguayan Embassy. Banzer may attempt to
restore his image as a housecleaner by naming an
all-military cabinet soon, but this would be an
implicit recognition tha~yt his new political system
is crumbling about him'!
L? ding to and inextricably involved with the
militaryrAd discontent is the shoving and hauling in
r
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the civilian parties that make up the formal gov-
ernment coalition. The prospect of presidential
and legislative elections next year has brought
into the open conflicts that were papered over
when the coalition was formed. The right-wing
Bolivian Socialist Falange, beset by factionalism
and waning popular support, will need help if it is
to maintain its current share of government jobs
after the elections. The moderate Nationalist
Revolutionary Movement, which probably would
win a majority in a free election, would, of
course, like a chance to demonstrate its strength,
but it is not likely to get itl
'71 The senior military establishment still main-
tainsta bias against the Movement. The military
hopes to restrict both parties to urban election-.~
eering, isolating the Movement from the peasants
who provide the bulk of its voting strength. Such
a procedure would make the election meaningless,
and relegate the rural voter to a second-class citi-
zenship. It might tempt Movement leaders to
move over to the opposition rather than accept
such a short stick under Banzeq
q tiThe long-run danger for President Banzer is
at, by refusing to share power, he will force
together the very groups that could, if united,
supplant him. Younger military officers and
Movement leaders still see certain advantages in
continuing with Banzer, but if this perception
should change, they command both the muscle
for a coup and popular support for a new govern-
ment. There are no reports that the' two groups
are conspiring together, but it would be unusual if
at least preliminary soundings have not already
HAITI: FIRE ALARM
7qrPolitical unrest is on the increase in Port-au-
rince as the result of a second and third fire of
suspicious origin in the national palace. Although
the Duvalier regime calls the fires "accidental," it
is now convinced that they were deliberate and
designed to precipitate a coup.?
7?SRumors of coup plotting were rife a few
months ago, but few had been heard since the
shakeup of the armed forces in early August. The
security forces have been on full alert since the
first fire on 23 July. Even more stringent security
measures were imposed after the second fire, on
29 August especially around the presidential
compound
7 ?lThe commander of the presidential guard
wou d like to prove that the Leopards are re-
sponsible for the fires; he believes they have
usurped a number of duties previously assigned to
the presidential guard and infringed upon his role
as chief security adviser to the President. The
commander is conducting his own investigation of
the incidents and apparently believes that the
strong-arm interrogation techniques used when
the elder Duvalier ruled Haiti will prove more
effective than those used by the commission of
inquiry established by the President following the
first fire.'
77 he fires have intensified concern within the
Duva ier regime for its security. Critics of the
regime are beginning to speculate that the Duva-
liers are in serious trouble. This would appear to
be an exaggeration, but further such incidents
would seriously undermine public confidence in
the government. In these circumstances, President
Jean Claude Duvalier and his advisers may con-
clude that a show of force, such as a massive
arrest of suspects, is necessary in order to regain
the upper hand.
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COLOMBIA: ELECTION RUMBLES
The presidential campaign is alread~4nder
way despite the fact that almost eight months
remain until the election.
Colombia has been operating since 1958
under the National Front system. The system,
which alternates the presidency between the two
major parties-the Liberals and the Conserva-
tives-is due to end when President Pastrana's
term is completed next year. As a result, the
election in April 1974 will be the first genuine
presidential election in 25 years, and the major
political parties are in the throes of selecting
presidential candidates. The Liberal Party on 30
June named former foreign minister Alfonso
Lopez, and the Conservative Party is expected to
nominate party chief Alvaro Gomez later this
month. Both men are sons of former presidents of
Colombia. The third major party, the National
Popular Alliance of former dictator Gustavo
Rojas Pinilla, has yet to make a formal decision.
Bowing to considerable pressure from his party
leaders, the aging Rojas withdrew his candidacy
last week and recommended his daughter as the
party standard bearer. Maria Eugenia is almost
certain to win approval at the party convention
next month.
Rojas' action had been
expected for some time; party
leaders have been concerned
over his failing health. Fur-
ther, there were reports that
the party was disintegrating at
the local level for lack of a
candidate and strong leader-
ship. Party leaders expect that
Maria Eugenia will be an ag-
gressive and able campaigner
and that the party will benefit
from the younger and more
progressive image she will
bring. Perhaps of more impor-
tance is the fact that she is
much more flexible than her
Page 21
father in dealing with other parties, particularly
regarding election agreements.
It is generally agreed that the party is not
the powerhouse it was in 1970, when Pastrana
narrowly edged out General Rojas for the presi-
dency. Since then Rojas' declining health, a dis-
appointing showing in the 1972 municipal elec-
tions, defections, and rivalries within the organi-
zation have caused the party to lose political
clout. In addition, some of its leaders privately
question whether Colombians would vote for a
woman.
The issue that will dominate the campaign
has already appeared on the scene: inflation.
Politicians agree that inflation and the cost of
living will be the central theme of the campaigns,
with each candidate trying to pin the blame on
his opponents. Inflation in some form is endemic
in Colombia, but it becomes especially bad when
prices for coffee exports are high and foreign
loans easy to acquire. Judging by past per-
formance, none of the candidates is likely to do
much about inflation once in office, but each
hopes to ride popular concern with thin wallets
into the presidential chair
Rojas Pinilla and Maria Eugenia Rojas
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USSR: DAMAGED SU M All
54
The Soviet nuclear-p veered cruise missile
sub arine that arrived in Cuba on 4 August has
departed the Caribbean after suffering damage to
its port bow. It is being escorted by the Soviet
light cruiser and tanker that arrived the same day.
The submarine, with an eight-foot gash in its bow,
is moving under its own power, but its ability to
operate while submerged seems to have been
hampered.
The ships are probably en route to their
home port in the Northern Fleet area, an indica-
tion that there are no facilities in Cuba capable of
LOOKING FOR A NEW FORUM
The 25-nation disarmamenonferenc in
Geneva ended its 1973 session last week without
having made any perceptible progress toward
agreement on its two major problems-prohibiting
chemical weapons and extending the limited nu-
clear test ban to cover underground tests. The
lack of progress will probably encourage dis-
satisfied smaller states to renew attempts to estab-
lish another forum for disarmament talks in
which non-nuclear powers could play a larger
role.
One possibility is a world disarmament con-
ference, to be organized on an ad hoc basis under
UN auspices. Last November the UN General As-
sembly adopted a Soviet-sponsored resolution set-
ting up a committee to study the possibilities for
such a gathering. The committee was never
formally convened because of a dispute over its
composition and because of US and Chinese op-
position to the whole idea. Iran and Mexico are
now trying to revive the concept.
repairing the damage. The absence of a tender-
which normally accompanies submarines on visits
to Cuba-probably precluded making even tem-
porary repairs.
A Soviet destroyer and a diesel-attack sub-
marine remain in Cuba. They are participating in
exercises with the Cuban Navy that are scheduled
to continue intermittently until 9 October. The
diesel submarine was first observed at Cienfuegos
after entering the
CaribbeaQ undetecte
The Swedes and the Yugoslavs, among
others, have indicated that they will push to res-
urrect the UN disarmament commission. The
commission had an undistinguished record before
it ceased to function in the late 1960s. Its propo-
nents argue that the commission has one redeem-
ing feature-it could be reactivated quickly.
These alternatives do not have a bright fu-
ture in view of the opposition of one or more of
the five nuclear powers. Nevertheless, given their
disillusionment, the smaller nations will probably
push ahead with proposals in the General Assem-
bly this fall and try to put new pressure on the
US to reconsider its aversion to the discussion of
arms control topics in large multilateral forums
with high visibility and propaganda potential. If
these efforts enlist any support, they will tend to
erode the position of the Geneva conference,
which, despite its recent ineffectiveness, in earlier
years laid the ground-work for such milestone
the nonproliferation treaty.
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WEEKLY SUMMARY
Special Report
Norway and Sweden Go to the P9/is
Secret
N2 41
7 September 1973
No. 0386/73A
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JtUKL I
Summary
Elections this month in Norway and Sweden could bring about major changes
in both countries. Norwegian voters cast their ballots on 9-10 September; the
Swedes vote on 16 September.
Norway, the keystone of NATO's north flank, had a strong, stable government
until a few years ago. The lengthy wrangle over proposed EC membership caused the
downfall of two governments and left a "mini-coalition," representing a minority of
parliament, in power. The Norwegians now have an opportunity to restore stable
government, either under a revived Labor Party or a center-right coalition. But the
rising cost of running Norway's welfare state has succeeded EC membership as a
major issue, and the number of political parties has doubled; the chances are not
good that a strong government will be elected. Norway's relations with the US
should not be adversely affected no matter who wins.
Sweden, a self-appointed neutralist leader in Europe, has been governed by the
Social Democratic Party for over 40 years. This year Prime Minister Palme and his
party are in trouble. A general dissatisfaction, stemming largely from high taxes and
inflation, pervades Swedish society. The three old-line bourgeois parties could win if
they stick together and take advantage of their openings, but they have shown a
capacity for beating themselves in the past. If they do win, Swedish-US relations
certainly would improve.
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7 September 1973
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NORWAY
Norwegians go to the polls on 9-10 Septem-
ber in one of their more important elections in
recent years. Although the campaign is again
being fought over such welfare state issues as the
decline in purchasing power, the real question is
whether Norway can elect a purposeful govern-
ment of any persuasion. The referendum last year
on entry into the EC, which was rejected, caused
deep divisions within and among the old-line
parties and also led to the founding of many new
parties. This wide choice in parties may lead Nor-
wegians to disperse their votes so that no likely
party combination will be able to command a
parliamentary majority, and the divisions in the
old-line parties will make it difficult for them to
Per Borten and Trygve Bratteli
Special Report
cooperate in putting together a government after
the election.
Norwegian voters will be stuck with what-
ever parliamentary mix they choose for the next
four years. The constitution does not provide for
dissolving parliament or for calling a new election.
The "cussedness level" is high among Norwegians,
and if they exercise it this time around, as much
as they did in the EC referendum, the country
will be in for a period of factious and weak
coalition governments, much like the present
minority one. A Norwegian government that
could not grapple with contentious domestic and
foreign policy issues would not be in the interest
of the US. Norway has been a reliable NATO ally,
The last four years have brought swift and
drastic shifts in Norwegian attitudes. It began
with the election in 1969 when a four-party,
center-right coalition under Centrist Per Borten
won a narrow majority. Until then, the Labor
Party had won every election in Norway since
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sCUNt I
Party Election
Opin
ion Polls
1969
June 1972
Ju
ne 1973
August 1973
Labor
46.5
43.4
38.8
40.1
Conservative
19.6
20.4
17.2
17.1
Center
10.5
12.9
12.8
11.2
Christian People's
9.4
8.7
10.9
10.6
Liberal
9.4
7.2
3.4
3.9
New People's
-
-
4.1
3.8
Red Electoral Alliance
--
-
0.5
0.5*
Anders Lange
-
4.5
4.6
Socialist Electoral Alliance
-
-
7.8
7.8
Communist
Socialist Peoples
Democratic Socialist
Independent Socialists
Various Other
Lapp
Women's Joint List
Etc.
*Estimated
World War 11. The Borten government collapsed
in March 1971 when news leaked out that the
prime minister, whose government was pledged to
support EC membership, was actually trying to
sabotage the negotiations then under way with
the EC. The recriminations in the non-socialist
parties were so bitter that the Labor Party, which
had dominated the government for decades, was
able to move into the breach and form a minority
government under Trygve Bratteli.
The EC issue caused strains within Bratteli's
Labor Party, too, and he may have underesti-
mated the passions the subject evoked in the
Norwegian public. His government was also com-
mitted to taking Norway into the EC and, in an
effort to overcome objections within his party
and among the public, Bratteli vowed to resign if
the referendum on EC membership failed.
Opponents to Norwegian entry into the EC
were in nearly all parties, and they marshaled
their forces under an ad hoc group called the
Popular Movement Against the EC. It was a
mixed bag including elements from the far right
Christian People's Party, the middle-or-the-road
Liberals, the left-Socialists, and even Norway's
Communists. The referendum was held in late
September 1972, and when the results were in, it
was found that nearly 54 percent of the Nor-
wegian electorate had voted against full EC mem-
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>tL I1t I
bership. The Bratteli government resigned a few
days later.
Formation of a new government proved
difficult, but after several weeks a "mini-coali-
tion" emerged under Lars Korvald, chairman of
the Christian People's Party. The grouping in-
cluded the Center Party and the anti-EC faction
of the Liberal Party. The Conservative Party,
which remained united in backing the EC, refused
to participate. The Korvald government, the in-
cumbent in the election on 9-10 September, has
only 39 seats in the present 150-seat parliament,
which will be expanded to 155 after this election.
Nevertheless, the little coalition negotiated a free-
trade agreement with the EC, which was swiftly
ratified last spring, and survived an attempt by
Laborites to dump the government before parlia-
ment recessed for the summer. Although the
Korvald coalition is not popular, it has managed
to keep going, and this has not hurt the chances
of the member parties for attracting votes on
election day.
Since the major parties have sought to avoid
the EC issue during the campaign, the decline in
purchasing power probably ranks as the number
one election issue. Although salaries and wages
are rising, so is the cost of running Norway's
welfare state. All industrial wage earners suffered
a loss in disposable income in 1972. For farmers
and fishermen, the loss may have run as much as
15-20 percent. Although an average worker's pay
increased by over one half since the last welfare
legislation six years ago, his taxes doubled and the
consumer price index rose over 50 percent. Pen-
sioners have fared much better; today, a pen-
sioned couple has, per capita, nearly as much
disposable income as a worker with a family of
four. Norway, of course, will not abandon its
welfare system, but all political leaders have
called a moratorium on new welfare programs.
In addition to economic issues, the conserv-
ative parties criticize leftist proposals to liberalize
abortion laws, while the socialists back the trade
unionist goal of closed shops. Nearly all parties
sponsor an environmental plank. Foreign policy
Special Report
issues have played only a secondary role in the
campaign, and Norway's continued membership
in NATO is supported by all major parties.
Adding to the woes of the old-line political
parties is the recent emergence of a number of
new parties. Some 14 parties, about twice the
normal number, are scheduled to participate in
this election. Although none of the newcomers is
expected to garner a large number of votes, to-
gether they are capable of draining significant
support from the older parties.
The Labor Party, Norway's largest, has usu-
ally campaigned on a strong welfare platform;
robbed of that issue this year, the party has had
difficulty in putting together an attractive pack-
age. The Labor Party congress adopted a lack-
luster domestic program that pledges that a Labor
government will:
? Reorganize the system of production,
achieve genuine equality, and make democ-
racy a reality;
? Carry out rather ambiguous objectives
that most voters probably assumed the Labor
Party already championed;
? Change the tax system to improve the
lot of the wage earner at the expense of big
business and the rich;
? Improve "workers' satisfaction" by en-
suring more employee participation in man-
agement and by initiating new health and
safety programs;
? Institute new government controls over
banking and credit institutions. It cautiously
endorsed liberalized abortion policies.
In foreign policy, the congress once again
rejected a left-wing proposal to withdraw from
NATO and "demanded" that the US cease bomb-
ing in Cambodia. It also called for recognition of
North Korea, expressed solidarity with the
Allende regime in Chile, condemned French
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5tuht I
nuclear testing, and criticized Portugal, Greece,
and Turkey for their want of democracy. The
defection of EC opponents into a newly formed
leftist Democratic Socialist Party, the all-time low
registered by the party in polls earlier this year,
and a colorless platform make it doubtful that
Labor can win a clear majority this time out.
A recently formed leftist alliance composed
of the Democratic Socialists, the Socialist Peoples
Party, and the Communists is expected to cut
into Labor returns. The new alliance is called the
Socialist Electoral Pact, and it plans to submit a
"joint list" of candidates. This will allow the
three parties to pool their votes and increase their
chances for winning a few seats in parliament. In
the past, parties like the Socialist Peoples Party,
which received 3.4 percent of the national vote in
1969, ran on a separate ticket and failed to win
any seats.
On the right, the anti-tax phenomenon,
started in Denmark. has spread to Norway with
the formation of Anders Lange's Party for the
Drastic Reduction of Taxes, Fees, and Govern-
mental Interference. Lange, a long time anti-
welfare campaigner and dog-kennel owner, leads a
party that is expected to win some seats in parlia-
ment by appealing to the "cussedness" factor of
the Norwegian electorate. The Conservative Party
felt Lange's effect almost immediately and has
dropped steadily in popularity polls since the
anti-tax party was formed last spring.
A big win by Labor that would permit gov-
erning alone might be best for Norway. Failing
that, a minority Labor government drawing sup-
port from the left for domestic issues and from
the center and right on defense and foreign policy
issues might provide more stability than a non-
socialist coalition still reverberating from the
shock waves of the EC referendum. Furthermore,
the non-socialists have riot produced a leader of
any prominence. Former Centrist prime minister
Per Borten has sunk into obscurity since resigning
two years ago. The present government is gener-
ally an uncharismatic lot, personified by its Chris-
tian Democratic Prime Minister Lars Korvald,
sometimes referred to as the "colorless Chris-
tian." Laborite leader Trygve Bratteli stands well
to the fore of the competition.
Recent polls, however, show that the five
major non-socialist parties combined are running
well ahead of Labor. The Conservatives, who rep-
resent the largest party in this group, refused to
cooperate with the other four because of their
opposition to EC entry. The Conservatives might
again balk at joining any coalition with an anti-EC
taint. Furthermore, the split between the newly
formed New Peoples Party, made up of Liberals
who bolted the party over the EC, and the Liberal
Party, which is against EC entry, would compli-
cate matters for such a coalition. Indeed, a non-
socialist coalition could only succeed if the EC
membership issue could be kept dormant. The
Labor Party, which still advocates full EC mem-
bership, will probably raise the issue again within
the next four years, whether in the government or
out. Thus, the outlook for stable government is
not promising.
Neither a minority Labor government nor a
non-socialist coalition-the two most likely out-
comes-is likely to alter US-Norwegian relations
adversely. During the past four years, bilateral
relations have remained good under a non-social-
ist majority, a minority Labor government, and
the present, small rightist coalition.
SN EDEN
The Swedes vote on 16 September. The
battle lines in Sweden are more conventional than
in neighboring Norway. The three old-line
bourgeois opposition parties are once again chal-
lenging the Social Democrats who have been in
power in Sweden for more than 40 years. The
Center, Liberal, and Moderate Coalition
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N-brit I
(conservative) parties are in a strong position,
according to recent polls, to win a majority. They
may not, however, be able to sustain their tenu-
ous cooperation up to election day and beyond.
As some pundits are fond of saying, the Social
Democrats never win elections in Sweden, the
bourgeois parties lose them.
A general dissatisfaction, stemming primarily
from high taxes and inflation, pervades Swedish
society. In the three years since the last election,
Sweden has witnessed an unusual amount of labor
unrest and a large number of demonstrations.
Workers are showing a new proclivity to strike,
and irate housewives have led price protests and
food boycotts. This condition gives the opposi-
tion parties plenty of campaign fodder and they
have zeroed in on the government's management
of the economy. The Social Democrats have de-
fended themselves, pointing out, with some justi-
fication, that the Swedes have never had it so
good and arguing that the opposition represents
the "forces of reaction" which favor big business
and disregard the worker.
While Swedish polls are not an infallible indi-
cator, one of them taken last May showed that
only 40 percent approved the Social Democrats.
The party had not improved its standing appre-
ciably by August. In contrast, the party won 50.1
percent of the vote in the 1968 elections and 45.3
percent in 1970. The Social Democrats stayed in
power as a minority government, drawing support
from the Communists for a majority when neces-
sary. They will have to obtain 44-45 percent of
the vote this year to continue in this vein. The
party has lagged in past elections too, but always
managed to rally before the actual voting. This
year the rally has been late in coming, causing
some observers-perhaps prematurely-to forecast
Palme's defeat. The government can count on the
support of the massive Swedish Trade Union Con-
federation, and the party's position as incumbent
affords it considerable advantage.
Palme does not have the sort of popularity
that kept his predecessor, personable Tage Er-
lander, in office for 23 years. Palme is an aloof
Special Report
intellectual and has little in common with the
average man. He is respected for his brilliance and
dedication. He does have a following of sorts and
his chairmanship of the party is unchallenged.
Palme is the obvious choice to lead the govern-
ment: if the Social Democrats are returned.
His counterpart in the opposition, Center
Party chairman Thorbjorn Falldin, is the antith-
esis of Palme. Falldin, who would be prime minis-
ter if the bourgeois parties were to win, is a
relaxed, thoughtful man with none of the air of
lofty condescension surrounding Palme. Falldin
prov des a good balance to Gunnar Helen, the
intellectual leader of the Liberal Party, and to
Gosta Bohman, the sometimes abrasive Conserva-
tive Party leader.
There are several minor leftist parties. One,
the Left Party-Communist, has 17 seats in the
current 350-seat parliament. It gives the Social
Democrats a majority when needed. Another is
the newly formed Swedish Communist Party, an
ultra-left qroup favoring a Maoist approach. Like
its Scandinavian cousins Denmark and Norway,
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Thorbjorn Falldin
Sweden also has an anti-tax movement in the
newly formed Opinion Party. Neither of the new-
comers, nor the tiny religious-oriented Christian
Democratic Rally, is likely to gain representation
in the legislature. Left Party-Communist, how-
ever, may once again get the necessary 4 percent
of the national tally to win seats in parliament.
Taxes and unemployment held center stage
in the opening rounds of the campaign. Particu-
larly vulnerable on taxes, the Social Democrats
unveiled a scheme last month to increase old-age
pensions and at the same time reduce the tax
burden on workers by shifting the responsibility
of retirement contributions to employers. Some
Social Democrats, however, are skeptical that the
moves will neutralize the tax issue. In fact, there
are fears that the proposals may generate more
unemployment as management seeks to reduce
labor costs to cover the tax increase. According to
the polls, unemployment is the principal concern
of most Swedish voters. Government leaders hope
that subsidized relief work and seasonal adjust-
ments will improve the picture before the elec-
tions. The opposition has vowed it will "create
100,000 new jobs." Its 15-point program would
try to stimulate the growth of small- and medium-
sized companies through easy loans and reduced
payroll and other taxes. The program is far from
unique but addresses the complaint of business
leaders who charge that government is unsympa-
thetic to small business.
Inflation is another issue., and prices, particu-
larly for food, are indeed high and getting higher.
There are no food shortages in Sweden except
those dictated by a housewife's budget. Ground
beef and pork chops, for example, are as much as
$3 a pound with filet mignon running as high as
$9 a pound. Automobiles, clothing, and appli-
ances are equally expensive. The in-party, the
Social Democrats, naturally gets the blame for the
high prices.
Law and order is an important issue in
Sweden, as it is in many other Western countries.
The growth in civil crime and terrorism has
plagued the Palme government. The assassination
by Croat terrorists of the Yugoslav ambassador in
1971, airline hijacking and sabotage, and rowdy,
drug-using youth all get front-page spreads in
Swedish papers. The six-day siege by hundreds of
police against two bankrobbers and their hostages
in downtown Stockholm last month was a blow
to the Social Democrats' liberal, avant-garde penal
system. Critics have also scored the government
for recent anti-terrorist legislation permitting wire
taps and mail surveillance of aliens and for the
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"Big Brother" effect of 75 television cameras
providing security in downtown Stockholm.
Many Swedes would like to see their govern-
ment decentralized. The government, which tends
to move in the opposite direction, has spoken of
plans to restore some national authority to re-
gional governments. The collective affiliation of
trade union members with political parties, fa-
vored by the Social Democrats, is opposed by the
Communists as well as the opposition because it
often forces members of the other parties to
subsidize the Social Democrats. Another issue was
injected into the campaign when a pro-Commu-
nist magazine exposed Sweden's top secret for-
eign intelligence service, the Information Bureau,
which was reported to have been active in domr-_es-
tic affairs, particularly against Communist activi-
ties in trade unions and political organizations.
While the Social Democrats' stand on most of
these issues shows the party's preference for
strong central control, the opposition has not
attempted to string them together, preferring in-
stead to pursue the more popular arguments pro-
vided by domestic economic problems.
Although foreign policy is not a big issue
this year, Prime Minister Palme has been criticized
for the deplorable state of US-Swedish relations,
which sunk to new lows last December following
his strong criticism of US policy in Vietnam.
Right now, neither country is represented by a
resident ambassador. The opposition has scored
Palme for "making an enemy" of the US, and a
change in government would undoubtedly result
in improved bilateral relations.
The race is close and could go either way.
The Social Democrats must pick up an additional
3 or 4 percent in order to continue as a minority
government. This presupposes, of course, that
their Communist partners get the 4 percent
needed for representation in parliament. This is
not an impossible prospect, and, indeed, the
Social Democrats have begun to project cautious
optimism. The death of King Gustaf VI Adolf,
who is seriously ill, could hamper the Social
Democrats' campaign. The King's demise would
result in a moratorium on political campaigning
for six to ten days which might stall the Social
Democratic comeback or even postpone the
election.
The opposition parties, all told, have
manacled to sustain a majority in polls for nearly a
year. If the polls are accurate, and do not reflect
idle carping forgotten in the voting booth, the
Social Democrats are in real trouble. The
bourgeois parties must keep together, something
they have been unable to do in the past. They
must also rebuff attempts by the Social Democrat
Party to entice one of their number into a
coalition if Palme fails to garner enough votes to
go it alone. If the Centrists and the Liberals can
continue to cooperate with the conservatives and
shun the divisive tactics of the Social Democrats,
this could be the year the opposition "throws the
rascals out."
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