WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A010600030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: May 27, 2008
• Sequence Number: 1
• Publication Date: November 30, 1973
• Content Type: SUMMARY

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Secret
Weekly Summary
Secret
30 November 1973
No. 0398/73
Copy N2 60
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I`he WEEKLY SUMMARY, issued every Friday morning by
the Office cif Current Intelligence, reports and analyzes signif-
icant developments of the week through noon on Thursday.
It frequently includes material coordinated with or prepared
?.,iy the Offi.--e of Economic Research, the Office of strategic
Research, znd the Directorate of Science and Tecinology.
Topics requiring more comprehensive treatment avd there-
io?epubIist.eci separately as Special Reports are listed n the
c ntents.
Et< l-Y SUMMARY contains classified iformation
inq the national security of the United State within
n eanimli of Title 18, sections 793 and 794, of the US
Code, as ar,,ended. Its transmission or revelation of .its con-
ants to or receipt by anunauthorized person is proh bited by
25X11 .
25 Fuller Rice Bowls
25 World Trade Talks Continue
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CONTENTS (31) November 1973)
EAST AS I A
PACIFIC:
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 Greece: The Army Again
3 The Middle East
8 Korea: From the UN to Talks
8 Laos: A Step Forward
9 Thailand: Whither the Students?
10 Vietnam: The Game Gets Rougher
11 Cambodia: Trying for An Early Start
1.2 Japan: Cabinet; Foreign Exchange
14 Papua New Guinea: Toward Independence
i8 Denmark: Election Outlook
22 Argentina: Ailing Leader
22 Cuba: Criticism of Peron
23 Bolivia: Banzer Government Split
23 Dominican Republic: Spotlight on Bosch
24 Peru: Truce Falters
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Greece: The Arm Again
_
Militar ?
y police chief Dimitrios loa icl and
elements of the Greek Army took over in a blood-
less coup on 25 November, ousting President
Papadopoulos and ending his cautious steps to-
ward a limited parliamentary system. The new
government, formally headed by General Phaiden
Gizikis, faces the same problems-public order,
political freedom, and economic stability and
growth-as the old one, but has even less talent
and resources for coming to ,_._---
grips with them. Although
the new junta is distinctly
rightist, it has no intention of
restoring the monarchy.
The coup leaders, who
had helped Papadopoulos
come to power in 1967, felt
he had betrayed the Spartan
ideals of that "revolution."
In their view, he had not only
failed to "cleanse" Greek so-
ciety, but had tried instead to
consolidate his personal
power and to give the Greek
people too many liberties too
soon. Central to the coup
leaders' motivations was a de-
sire to refurbish the reputa-
tion of the army, which they
felt had been tarnished by
nepotism and corruption
under the now-ousted regime.
The key officers also
had strong personal reasons.
Papadopoulos had tried sev-
eral times in recent months to move loannidis to
a less sensitive position outside Athens. Gizikis,
who provided the essential military support for
the coup, had been placed on the retirement list
last summer, although he had successfully resisted
being forced out. loannidis privately indicated he
had been planning his move for six months.
Any elections are likely to be a long way off.
The new leaders have explained their action Among the leaders of the 1967 coup that over-
as a move to avert national dangers, including an threw Greece's parliamentary government,
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"electoral adventure." loannidis has disclaimed
any personal ambitions, insisting that he inter-
vened only to repair the damage done to the army
and to restore "normal political life" under a new
constitution. He has said he will remain in his
present position as head of the military police. An
undistinguished cabinet, which includes no active
military officers, has been named; Prime Minister
Androutsopoulos, who held a ministerial post
OFFICIAL EMBLEM OF THE
GREEK REVOLUTION
Following the referendum estab-
lishing a republic last summer, the
soldier was taken off this emblem; he
has now reappeared.
under Papadopoulos until last
spring, has been unable to en-
tice any experienced officials
into the government.
loannidis has lifted for-
mal press censorship, but ad-
monished the media not to
criticize the new regime. He
has stated privately that the
new government will embrace
all "politically clean young
nationalists of the right and
center," but will avoid the
"experiments" of the previous
regime with "leftists." loan-
nidis has long been suspicious
of the major old-line politi-
cians and has rejected com-
promise with any of them.
In a radio/TV address on
28 November, the new Prime
Minister promised that his
government would draft a
new constitution and lead the
country to democratic rule,
but held out little hope for
early moves in that direction. He announced the
removal of the underpinnings of the ousted re-
gime-the 1968 constitution, the constitutional
court and the Supreme Council of Civil Serv-
ants-and said that elections would be held when
the country was ready.
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loannidis and his group are probably the most
apprehensive of an early return tc democratic
institutions. loannidis has said than. he favored
free elections at the proper time but that eco-
nomic priorities must be attended to first. Some
months ago he was quoted as saying that the
Papadopoulos junta had been in power too short
a time to experiment with democracy; it needed
"at least ten years" to carry out its program.
In a bid for popular support, the new gov-
ernment has released most of the students ar-
rested during the recent demonstrations
Reaction to the coup in Greece has been one
of widespread relief and euphoria that Papa-
dopoulos is gone, but this may be short-lived. For
the most part, Greeks across the political spec-
trum have adopted a wait-and-see attitude.
The charge in government may hurt
Greece's relations with Cyprus. Many of the offi-
cers who carried out the coup have served in
Cyprus, some under President Makarios' arch
rival, General Grivas. Makarios may fear that they
will be more sympathetic toward Grivas' militant
effort to promote enosis-union of Cyprus with
Greece. For the time being, however, the new
rulers in Athens will be preoccupied with sorting
things out domestically.
European reaction to the coup has been al-
most universally negative. The EC has reiterated
its long-standing position that Greece's asso-
ciation with the community can only be devel-
oped further if and when democratic institutions
are established. The new junta is pro-NATO and
specifically pro-US, but it also promises to be
more nationalistic and hence more difficult to
deal with than its predecessor.
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The Middle East
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(.9-)1
views the six-point accord arranged last month by
Secretary Kissinger as a package that must be
implemented as a whole, not selectively. Point
two of the package, in the Egyptian interpreta-
tion, requires some tangible Israeli withdrawal,
sooner rather than later. The Egyptians are ready
to skirt the controversial question of a pullback
to the cease-fire lines of 22 October, if this will
produce a wider disengagement, but they view
protracted haggling on the specifics of disengage-
ment as an Israeli attempt to delay withdrawing
at all.
pension rose on both the Egyptian and
Syrian fronts during the past week as a result of
the failure of Israeli and Egyptian representatives
to reach agreement on the disengagement of their
respective forces. Once again, the Israelis and
their Arab adversaries appeared to be caught in an
upward spiral of preparations for a possible re-
sumption of hostilities. For the most part, how-
ever, both sides seemed to be trying to avoid
actual armed encounters so as not to damage
prospects for the start of the peace conference,
now proposed for 18 December in Geneva. In
preparation for that landmark event, Egyptian
President Sadat gained wide support for the nego-
tiations from the meeting of Arab leaders in
Algiers this week, while Israel's Mrs. Meir won a
vote of confidence from her party.
Debate on Disengagement
Military representatives of Egypt and Israel
met five times between 22 and 29 November, but
were unable to reconcile their respective pro-
posals on disengagement. Since its initial sug-
gestion of a mutual pullback to opposite sides of
the Suez Canal was rejected, Israel has concen-
trated on its proposal to withdraw from both
banks to a line approximately ten kilometers east
of the canal. Tel Aviv has conditioned this offer,
however, on a severe thinning out of Egyptian
forces on the east bank-a move Cairo considers
too damaging to the military credibility it estab-
lished in the recent fighting. The Egyptians, for
their part, have put forth equally unacceptable
proposals calling for a more extensive Israeli with-
drawal from the canal to a line east of the stra-
tegic Sinai passes, which would thus pass from
Israeli control. As of noon Thursday, the two
sides seemed within range of a compromise on the
location of a disengagement line, but Israel's re-
quirement that Egypt station only "policing" and
not military forces on the east bank remained a
major sticking point.
The Egyptians have become increasingly
concerned that Israel is merely stalling. Cairo
Israeli officials have suggested that the ques-
tion may have to be held over to the formal peace
conference. Egyptian officials have interpreted
this as confirmation of Israeli stalling tactics.
They have indicated that as far as Cairo is
concerned, agreement on some withdrawal might
become a prerequisite for convening the con-
ference.
The question of the 127 Israeli prisoners
that Tel Aviv claims are in Syrian hands also
remains stalemated. The Syrians have tied an ex-
change of prisoners to progress toward an Israeli
withdrawal from Syrian territory; Israeli officials
have generally taken the line that the two issues
are not related, but that a peace conference could
be held up by a refusal to return the prisoners.
Mrs. Meir, however, offered this week to give up
two fortified positions on Mount Hermon in
return for the prisoners. Syria has not reacted
officially.
Some progress may have been made on one
of the unspoken "understandings" that ac-
companied the six-point accord. Without being
specific, Israel's Trade and Industry Minister Bar
Lev indicated on 26 November that Egypt may
have lifted its blockade at the Strait of Bab al-
Mandab at the entrance to the Red Sea. Asked at
a press conference about the status of the
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-11
blockade, Bar Lev replied that, "3s far as we
know," the cease-fire is being observed on land,
air, and sea.
The diplomatic impasse has led to renewed
talk of war on all sides, with each claiming to see
the other making preparations. Egyptian forces
on the east bank of the canal and on the peri-
meter of Israel's west bank salient were aDDar-
ently reinforced again late last week]
The Israelis themselves are on heightened
alert on both fronts, as well as along their border
with Jordan-a potential third front. There have
been indications that some reserves were again
mobilized late last week.
Israeli officials
continue to talk publicly of Israel's readiness for
renewed warfare. Defense Minister Dayan re-
cently claimed that Israel is just at the beginning,
not at the end, of war with Egypt and Syria.
Tel Aviv has agreed to attend the inaugural
session of talks on an Arab-Israeli peace settle-
ment next month. It has reiterated, however, that
it cannot make any substantive commitments
prior to parliamentary elections on .31 December.
In general, the Israelis feel themselves sliding into
THE UN PEACE-KEEPING FORCE
Less than half of the planned 7,000-man
UN peace-keeping force is actually in Egypt,
and its effectiveness remains limited. This
week, however, several steps were taken that
could speed up the arrival of the remaining
personnel that have been committed and
hasten the flow of essential supplies.
The General Assembly's Finance Com-
mittee approved plans for a special assessment
of UN members to pay for the force. The
approved scale of assessment-which the as-
sembly is expected to levy next week-will
place the major burden on the developed
states, particularly the US, Soviet Union,
France, and the UK. China, which has an-
nounced that it will not contribute, did not
participate in the vote. In addition, the Secu-
rity Council agreed to add Kenya and Senegal
to the eleven states at present providing
troops for the force. These additions should
bring the total number of troops close to the
authorized ceiling.
Canada and Poland also reached agree-
ment this week on dividing the responsibilities
in their joint logistic unit. Their protracted
negotiations over the unit's organization had
delayed badly needed transportation and sup-
port facilities.
the talks at a distinct disadvantage. They are
clearly anxious about US intentions and are well
aware of the effective leverage that the Arabs
have gained on the West by their oil restrictions.
A variety of views are coming out of Israel,
but they boil down to two basic themes: one, a
hope for peace; the other, deep doubts that it can
be achieved on a basis that gives Israelis a sense of
security. Foreign Minister Eban, for example, saw
both "dangers and opportunities" in the talks; he
re-emphasized the hope that Israel could bank on
firm US support. Prime Minister Meir, comment-
ing on peace prospects, indicated that the signs
she saw "were not too encouraging."
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was most despondent over the "complete isolat-
ion" of her country; she said she was "forever"
indebted to the US for its help, but that she
would welcome the re-establishment of relations
with Moscow.
The impending peace conference and Israeli
parliamentary elections prompted some unusually
tough talk from Defense Minister Dayan this
week. A week ago, Dayan was philosophically
urging Israelis to face up to the "new reality,"
and to curry strong US support. This week-per-
haps in part to take some of the domestic politi-
cal heat off the government and himself-he
stated flatly that Israel was "not about to become
the victim of unsafe borders, just because some
people need oil."
Dayan expressed new doubt that the Arabs
really wanted peace, and urged Israel-"even if
Americans think differently"-to hold fast to the
Golan Heights, the high ground over Jordan's
West Bank, and Sharm ash Shaykh at the tip of
the Sinai. He reiterated that Israel should reject
withdrawal to the borders it had before June
1967, even if these were internationally guaran-
teed. Such guarantees, he said, should comple-
ment defensible borders, not supplant them.
Dayan is due in Washington next week and un-
doubtedly will press these views on US officials.
Deputy Prime Minister Allon, on the other
hand, has urged a "fair" territorial compromise.
He indicated that he personally could accept bor-
der changes if they were accompanied by large
demilitarized zones. He said Israel should make
every effort, including "painful" compromises, to
achieve a peace settlement. Renewed war, he
thought, would put an end to the chances for a
settlement.
(J ~:p - //)
have been calling for a reshuffle or removal of the
party leadership, a reopening of the party's list of
candidates for the elections, and an easing of the
platform provisions regarding the occupied terri-
tories.
At a meeting of the party's central commit-
tee on 28 November, the dissidents' bid to reopen
the candidates' list was turned back by a wide
margin. The vote, in effect, reconfirmed Mrs. Meir
as party leader, at least until after the elections,
and left Dayan on the list. It was agreed that
changes would be made in the platform "to adapt
it to the new reality." The top leaders have
already drafted the new version, which is to be
presented later to the central committee.
The somewhat softened platform stresses
that Israel's "central aim" is to achieve peace and
describes the coming talks as the "most valuable
event in the history of the Middle East." It also
stresses that the peace must be negotiated "with-
out pressure" or preconditions, and that Israel
expects, in the wake of a settlement, a new era of
"normal relations." It avoids mention of the 51
Israeli settlements in the occupied territories, and
emphasizes both "territorial compromise" and
preservation of the Jewish character of Israel-a
formulation that in effect renounces any inten-
tion to hold permanently any areas with large
Arab populations.
With these concessions to the doves, the
revised platform then reverts to some long-
standing Israeli tenets that are in fundamental
opposition to Arab aims:
? Israel must have defensible borders;
Debate in the Labor Party
Elements within Mrs. Meir's Labor Party are
pressing for a softer Israeli stance. These are the
so-called doves, most obviously younger elements
and intellectuals, but probably also such impor-
tant figures as Foreign Minister Eban and party
boss and Finance Minister Sapir. The dissidents
? it will not return to the lines that existed
prior to the June 1967 war;
? Jerusalem will remain united and under
Israeli control;
? Israel is opposed to a separate, independ-
ent Palestinian state on Jordan's West Bank.
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This contention within the Labor Party re-
flects a country-wide pre-election debate regard-
ing the government's past policies and the course
Israel should follow now. At present, there is
strong sentiment for Israel to make a genuine
effort to obtain a peace settlement or at least to
find out, once and for all, if the Arabs most
directly concerned are sincere in their professed
willingness to accept an Israeli state in their
midst.
Arab Summitry
With neither the Libyans nor the Iraqis on
hand to act as spoilers, other top Arab leaders
ended three days of talks in Algiers on Wednesday
on a buoyant note, reaffirming the unprecedented
degree of Arab solidarity achieved as z result of
the October war. The only known wrangling
occurred over the Palestinian issue. In the end,
the conferees almost unanimously decided to
recognize the Palestine Liberation Orgarization as
the sole legitimate spokesman for the Palestinian
people, despite King Husayn's threat to boycott
the Geneva peace conference if they did so.
President Sadat-with the aid of King Faysal,
President Asad, and others-apparently obtained
the mixture of vague, flexible resolutions he
hoped for, implicitly supporting his decision to
negotiate with the Israelis. After the final session,
the Arabs issued their standard call for the im-
mediate withdrawa of the Israelis from all occu-
pied Arab territory and for the restoration of the
"national rights" of the Palestinians. The declara-
tion warned that unless these two conditions were
met, there could be no peace. In their closing
remarks, both Sadat and Asad stressed the need
for continued Arab unity. Sadat also touched on
the possibility of renewed fighting, but reportedly
declared that war was not the answer to the
situation and that the Arabs were now on the
right path.
Arab League Secretary General Mahmud
Riad told the press that the Arabs would continue
to use oil as a political weapon and that the
ministerial committee of the Organization of
Arab Petroleum Exporting Countries would re-
view the situation periodically to determine
which countries would receive oil. Because of
their shift to a more pro-Arab line, Riad said that
Japan and the Philippines would be exempted,
along with most West European countries, from
the 5-percent cutback scheduled for December.
As a gesture of thanks to the black African states
that broke diplomatic relations with Israel, the
summit agreed to make sure they receive an ade-
quate supply of of and to embargo the flow of
Empty Libyan and Iraqi seats at Arab Conference
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Arab oil to South Africa, Rhodesia, and Portugal.
The Arabs also promised to sever any diplomatic
and economic ties with those countries.
Husayn and the Palestinians
The summit decision to back the Palestine
Liberation Organization's claim to represent the
Palestinians poses a serious dilemma for Jordan's
King Husayn. Although he flatly stated that he
would not attend the peace talks if the summit
took this step, he clearly does not want to abdi-
cate to the fedayeen his claim to sovereignty over
Jordan's West Bank, occupied by Israel since
1967.
The Palestine Liberation Organization re-
portedly has indicated that it is willing to reach
an understanding with Husayn only if he recog-
nizes the fedayeen organization as the sole legiti-
mate spokesman for Palestinians and allows the
fedayeen to re-establish a military and political
presence in Jordan. In addition, fedayeen leader
Yasir Arafat told Al Ahram this week that any
declaration of a government-in-exile was "prema-
ture" and that a decision on whether the feda-
yeen would attend the peace talks was being held
in abeyance, apparently until an invitation is re-
ceived.
Moscow is still trying to get back into the
mainstream of Middle East developments. A few
days after Yasir Arafat and other fedayeen leaders
ended their visit to Moscow on 24 November,
several high-ranking Soviet party officials were
sent to Baghdad and Cairo.
The Arafat visit was handled in a low key.
The Soviets waited until two days after the dele-
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~- ll
ga ion had eft to acknowledge the visit and then
stressed its "unofficial" nature. If any specific
Soviet commitments were made, they were not
publicized, although Moscow again endorsed the
"legitimate national rights" of the Palestinians.
Nevertheless, Soviet leaders have made it
clear that the problem of the Palestinians must be
treated at a peace conference. The cautious han-
dling of the Arafat delegation probably indicates
that Moscow will reserve its position until the
Palestinians and the Arab governments have
worked out their own policy on this complex
issue.
Meanwhile, the Soviets are pressing for full
implementation of the cease-fire agreement, in-
cluding the pull-back of troops to the lines of 22
October. On the scene, a portion of the 36-man
Soviet contribution to the corps of UN truce
observers has been integrated into operations in
Egypt. The remainder will join UN teams in Syria
and Lebanon.
Moscow's interest in getting a peace confer-
ence under way quickly was a central theme in
the comments made by Foreign Minister Gro-
myko during recent talks with Canadian Foreign
Minister Sharp. Gromyko said the conference
should begin by mid-December and, while taking
a tough line on Israeli withdrawal from all occu-
pied territories, left open a number of possibilities
for guaranteeing Israeli borders. He suggested that
the Great Powers, the Security Council, or both,
might be responsible for the guarantees and ar-
gued that if the Security Council were involved, a
way could be found to avoid having decisions
hamstrun by the veto.
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KOREA: FROM THE UN TO TALKS . )
Z-' !Months of intense diplomatic lobbying by //
Seoul and Pyongyang at the UN ended last week
in a compromise on "the Korea question." A
S- L statement worked out behind the scenes by their
major allies replaced the conflicting resolutions
put forward b
the ri
l K
t
T
y
va
orean s
ates.
he com-
promise
avoided the most controversial issues-
the future of the UN Command, the US troop
presence in South Korea, and the proposed UN
membership for both Koreas-endorsing instead
the July 1972 Korean formula for unification
"without foreign intervention." The statement
was accepted by the General Assembly on 28
November
2 ( (Neither Seoul nor Pyongyang apparently be-
lieved it had sufficient support to assure victory
for its - own resolution. Seoul appears to be the
principal beneficiary of the compromise-7Tt fore-
-L-n stalled for a year at least the possibility of a
~ clear-cut General Assembly vote backing Pyong-
yang's demand for an end to the UN Command
and the withdrawal of US troops from South
Korea. Pyongyang did succeed in scuttl ng Seoul's
proposal for dual UN membership, and the North
Koreans will undoubtedly represent the assem-
bly's endorsement of bilateral talks as an interna-
tional sanction of US military withdrawal.?
I-(, 'The statement has set the stage for a resump-
tion of direct North-South discussions, suspended
since last summer. Anticipating increased UN
pressures for such talks, Seoul took the initiative
on 15 November by proposing resumption of
both the Red Cross meetin s and the South-North
Coordinating Committee1 The North agreed to a
meeting on the 28th at Panmunjom to plan for
full-dress Red Cross talks in Seoul next month,
and has proposed discussions between the deputy
chairmen of the coordinating committee on 5
December, also at Panmunjom.(
-L~l I' he South Koreans appear ready 1:o modify
their earlier positions in order to get these nego-
tiations moving. Seoul has indicated its willing-
ness to discuss Pyongyang's long-standing demand
for a change in the membership of the coor-
dinating committee. It may be prepared to re-
place three of its top representatives, most sig-
nificantly South Korean CIA Director Yi Hu-rak.l
-Lip Pyongyang, for its part, is still attempting to
wring political concessions from the South. It has
proposed Red Cross talks in Pyongyang, claiming
that the political atmosphere in Seoul is too op-
pressive. As a result, these preliminary negotia-
tions will probably take several weeks, and a full
resumption of the Korean dialogue is not likely to
LAOS: A STEP FORM RD
2
rAnother milestone on the long road toward
forming a new coalition government was reached
last week. The first plenary session of the Joint
Central Commission to Implement the Agreement
met on 23 November after two months of Com-
munist foot-dragging. The Communists had re-
fused to hold a formal session of the Joint Com-
mission until they were satisfied with security and
housekeeping arrangements. Once agreement was
reached on this, however, the Communists, unlike
their Vientiane counterparts, came prepared with
an agenda and a set of priorities. In a tough
opening address, Communist spokesman Soth
Phetrasy made it clear that there could be no
coalition government until both Vientiane and
Luang Prabang are neutralized-in effect demand-
ing that government forces be reduced to match
the Communist troops currently in the two
capitals.
Although these terms are spelled out in the
peace agreement, Prime Minister Souvanna will
have a hard time convincing the Lao generals to
comply in the near future. The generals, reluctant
to face up to the implications of the Laos settle-
ment, still regard the Communist troops in Vien-
tiane and Luang Prabang as interlopers. While the
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army has acknowledged the need to move some
of its troops away from the comfortable garrisons
in the capitals, it is in no hurry to do so.
In addition to achieving this military bal-
ance, the Communists are also pushing for joint
police patrols, a total cease-fire, an exchange of
prisoner of war information, and the "definitive
end" to all "foreign aviation activities." Despite
the progress made to date, this formidable series
of obstacles appears to rule out the early forma-
tion of a new government.
THAILAND: WHITHER THE STUDENTS?
36
the conservative National Student Center of
Thailand, which played a central role in toppling
the Thanom government, has itself fallen victim
to student pressures. The group's executive coun-
cil resigned en masse on 18 November. It did so
because of continuing dissension over its role in
the demonstrations in October, when the council
attempted to stop the student outburst short of
demanding Prime Minister Thanom's resignation.
Far from signaling the end of a nationwide stu-
dent organization in Thailand, the resignations
portend a move toward a more aggressive and
leftist movement in tune with the mood of the
campuses today'
72-rThe resignation of the executive council was
engineered largely by student leader Seksan
Prasertkun, a 25-year-old political science student
at Thammasat University. Seksan, who emerged
from the riots as something of a national hero,
had sought to push the council leadership aside
earlier this month but failed. Seksan's resignation
set in motion a train of events which led inevita-
bly to the council's resignation 16 days later'
3 3 cSeksan is now clearly the front-runner to
move up to the top spot when a new council is
formed, but whether he does or not , the election
of a more activist leadership seems certain. Sek-
san's followers will not be content to return to
the classrooms because they see themselves play-
ing an important role in guiding their country
toward democracy. Little is known of Seksan's
SECRET
political views, but he is clearly to the left of
most Thai officials,?
25X1
$ 3 This shift to the left has been accompanied
by a step-up in student-instigated demonstrations
against corrupt or unpopular officials throughout
the country. Coupled with continued student agi-
tation in Bangkok, these pressures have begun to
rattle the government. Prime Minister Sanya, for
instance, has requested an end to the demonstra25X1
tions so that the country can return to a more
normal stat
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The Game Gets Rougher their resources rather than react to every South
Vietnamese action
'3a I_Both Saigon and the Communists continue
to raise the military ante in the highlancs and the
region north of Saigon. South Vietnamese aircraft Shakeup in Saigon
struck hard at major Communist command com-
plexes in the border provinces north of the capital 3 y [Over the past few weeks, President Thieu has
for the second time last week. Commanders in d' begun one of the most extensive shakeups of the
Military Regions 2 and 3 plan to step up ground 35government and military hierarchy in several
actions against Communist bases and troop con years. One military region commander, several
ql centrat
ons north of Saigon and in the highlands a' regional staff officers, five new division com-
/ manders, and at least nine new province chiefs, as
5 well as several cabinet ministers
have been an-
,
14'L the government's willingness to resort to pointed in the past month. Most recently, exten-
large-scale military action undoubtedly reflects its sive changes were announced in the command
growing concern over recent Communist moves in structure in MRs 2, 3, and 4, and there are indica-
these areas. North Vietnamese troops 'n Quang tions that more are still to come
Duc Province have heavily fortified their recent
gains along Route 14 and give every iidication
that they are determined to hold on to the newly
.`captured terrain
H3- fSaigon's moves in both regions are being
watched closely by the Communists, who seem
well aware of the government's intentions.
s the government transfers most of
its main-force units to the highlands from Binh
'j'{ 1The changes were triggered chiefly by
Thieu's disappointment over the lack of aggres-
siveness of the officials involved. Many of the
Sshifts occurred in the key region north of Saigon,
for example, where the government has been un-
able to recapture significant territory or reduce
the Communist threat substantially. Others, such
as in the highlands, were the result of the Com-
munists' success in pushing back the government
at several points. The replacements may be an
attempt to prepare for heavier fighting in the
months to come; last year, Thieu waited until
several weeks after the Communists launched
their offe sive before removing ineffective com-
manders.
Dinh and Phu Yen provinces, the Communists
will be aware of the weakened defenses in coastal 3'
areas and ]Fould take advantage of these weak,
3l
points. Recent government actions have not pro
voked the sort of military retaliation that was3
triggered by earlier air strikes. Although -:he Com-
munists will doubtless strongly oppose govern-
ment operations that seriously impinge on Com-
munist territory, they may choose to husband
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CAMBODIA: TRYING FOR AN EARLY START
if / Late and heavy rains do not appear to have
dam ened the Khmer Communists' determination
to implement their dry-season plans. Early this
week, Communist gunners ambushed a 13-ship
supply convoy on the Mekong River. The Cam-
bodian Air Force and Navy afforded relatively
good protection and only one small vessel was
sunk. A smaller convoy made the run up river
unscathed on 28 November, however. The govern-
ment's ability to keep the Mekong open for the
next six weeks-while it builds stockpiles of rice,
fuel, and military equipment-is crucial.?
4 C [In the countryside, the Communists are
keeping Phnom Penh's two overland supply lines
cut. Government clearing operations on Route 4
are foundering in the face of heavy Communist
shelling attacks, and the insurgents now control a
seven- He stretch of road southwest of Kompong
Speul Aerial photography reveals that they have
dug up the road surface in that areal[Meanwhile,
Route 5, leading north from Phnom Penh, re-
JUmains closed. The Communists are keeping steady
pressure on government units near the towns of
Sala Lek Pram and 0 Sandan, at either end of the
11-mile road cut -1
however, where terrain is drying out and Cam-
bodian Army units have resumed operations along
[Communist military activity in the immedi-
te capital region this week was limited to spo-
radic mortar attacks-mostly east of the Mekong
in the Vihear Suor area--and a minor and ineffec-
tive rocket attack against Phnom Penh's airport.
The action may pick up soon south of the city,25X1
L [Forty miles south of Phnom Penh, Commu-
nist forces are continuing to press government
defenders at the isolated provincial capital of
Takeo. Fighting has moved to within a mile of the
city to the south, and positions on Takeo's north-
ern and western perimeters have been probed and
shelled daily. Phnom Penh has sent two battalions
of reinforcements to Takeo and is providing de-
fenders there with extensive air supporf
Phno
} Pe
Communist ,
extend ntrol
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L CA)
he appointment of TTeo Fukuda as fi-
nance minister signals a stronger resolve on the
part of Prime Minister Tanaka to deal with
Japan's domestic economic problems. The
changes in the cabinet, including siifts in ten
minor posts, followed the sudden death of Fi-
nance Minister Kiichi Aichi last week.
Fukuda, finance minister in the Sato govern-
ment and Tanaka's chief rival in the ruling Liberal
Democratic Party, has been the harshest critic of
present economic policies. The Japarese are suf-
fering severe inflation-a 20-percent rise in the
wholesale price index and a 15-percen-: increase in
consumer prices over the past 12 months. The
fiscal and monetary restraints san_tioned by
Tanaka have so far failed to curb the inflation,
and the petroleum shortage is adding to a crisis
atmosphere.
Mounting domestic problems have already
forced Tanaka to shelve some of the policies
Fukuda had criticized. The appointment provides
the prime minister with a face-saving means of
changing aspects of his economic program.
Fukuda probably accepted Tanaka's offer of
the powerful finance portfolio only with the
promise of a relatively free hand in guiding eco-
nomic policy. The new finance minister has already
called for delays in government outlays for such
high-cost projects as the expansion of the super-
speed railways, and is encouraging buc'get cuts. If
Fukuda is intent on controlling inflation, he will
also press Tanaka to set aside political considera-
tions and scrap plans for a large cut in Japan's
personal income tax. This measure, like the plan
to benefit farmers by raising the official rice
price, was designed to win support for the Liberal
Democrats in the Upper House election next year.
fhe government will be able to respond
more effectively to current economic difficulties
with Fukuda supporting the prime minister. The
opposition parties are preparing major attacks on
Tanaka's economic policies, and the new unity of
the ruling party will face an early test when the
Diet convenes on 1 December'
FOREIGN EXCH GE RESER S DROP
~ ~~' 5 o~
Japan's offic foreign exchange holdings
are declining sharply, totaling about $14 billion at
the end of October, compared with the peak of
$19 billion in February 1973. Reserves will prob-
ably fall by $1-2 billion in November because the
central bank is intervening heavily in the Tokyo
money market. So far this month the Bank of
Japan has sold nearly $2.3 billion to slow the
yen's decline relative to the dollar.
To limit the drop in official reserves, the
Bank of Japan recently called in $650 million of
about $5.5 billion it deposited in commercial
banks last year to slow the rise in official hold-
ings. At that time, large balance-of-payments
surpluses were being recorded. To make the
repayments, Japanese commercial banks are bor-
rowing heavily on the Eurodollar market. The
central bank is also limiting domestic financing of
foreign trade, restricting the export of capital,
and easing controls on capital inflows.
In other moves to ease the situation, Tokyo
has abandoned its goal of financing 50 percent of
imports domestically, and importers will have to
seek more funds overseas, presumably in the US.
At the same time, the Ministry of Finance has
removed limits on foreign purchases of Japanese
stocks. To limit speculative dollar buying, the
ministry has restricted purchases of US short-term
treasury bills, which had increased sharply in
recent weeks. Nevertheless, some Japanese of-
ficials believe that in the months ahead reserves
will drop to about $10 billion before stabilizing'
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Japan's Foreign Exchange Reserves
Billions
of
US. Dollars
0
1968 1969 1970 1971
1972 Oct.
1973
fighter, represents the current limit of the in-
dustry's own development capabilities. A ground-
support version of this aircraft is being developed,
with production to begin in 1976. The air force
has already ordered 68 of these aircraft. The
aircraft industry is producing a medium jet trans-
port for the air force; the transport has a short
takeoff-and-landing capability and uses engines
built in Japan under license1
5.1 he navy is ordering nine domestically de-
veloped PS-1 flying boats for anti-submarine
warfare as well as a few for search and rescue
missions. Several Japanese-designed light recon-
naissance aircraft have been ordered by the
ground force
VOf the aircraft to be built in Japan under
foreign licenses, 46 will be F-4Es for the air force;
eY Japan is the only foreign country to produce this
5 $'US aircraft. Eighty more of these planes are bein
g
AIRCRAFT PRODUCTION SOARS built under a previous defense plan. The ground
1,2- [Japan produced nearly a half billion dollars
wort[`
ort of aircraft last year-80 percent for its own
military forces. Although the aircraft industry has
increased its capability to produce advanced air-
craft, it remains highly dependent on foreign
c technology. Over 40 percent of the industry's
output by value comes from production of air-
craft either under foreign license or with im-
ported aircraft components7
force is scheduled to receive 154 helicopters of
various types, all to be produced under license.
The navy is obtaining anti-submarine aircraft, also
built under license, including 34 Sea King
helicopters and 43 P-2J patrol aircraft. Additional
minesweeping helicopters also are being produced
under license for the navy?
'53 [Future expansion of the market for Japan's
k military aircraft industry depends on increases in
"'domestic requirements, as the export of weapons
sal Tokyo's current five-year defense plan calls" is prohibited. The defense budget has not kept
forte purchase of 564 aircraft-including seven pace with Japan's growing economy, limiting the
new types-for its armed forces. Over 500 of purchase of military aircraft. As a result, tech-
If th
i
ese w
ll be built in Japan, most under US li-
cense. Five of the new type aircraft on order are
of Japanese design
5 [The air force has ordered 59 of Japan's first
supersonic jet trainer, the T-2. This aircraft,
74
which is similar to the Anglo-French Jaguar jet
nological improvements have been slow and
development programs have been costly, requiring
heavy subsidies by the government. For example,,
a ground-support fighter, currently under de-
velopment, probably will cost the governmen25X1
two or three times more per aircraft than im-
porting an equivalent or building it under li-
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Papua New Guinea
TOWARD INDEPENDENCE
For a colonial people to have the nudged
towlyd independence is an anomaly in an era
when the world's remaining dependencies are agi-
tating for freedom, but such is the case with
Papua New Guinea. Although deternined to
make a go at internal self-government when it is
handed them on 1 December, the leaders of the
Australian territory enter the final stzge before
full independence next year with a sense of fore-
boding. Canberra will oversee foreign affairs and
defense matters until such time. Less than con-
vinced that their multilingual and cul-:urally di-
verse country is ready to stand on its own, they
have argued unsuccessfully against what they see
as the Australian Government's unseemly haste in
divesting itself of one of the two remaining UN
trusteeships. Prime Minister Whitlam dismissed
their petition for more time, telling them, "You
have nothing to fear from independence." Some
Papua New Guineans suspect that Canberra's rush
stems less from altruism than from an nterest in
ingratiating itself with the anti-colonial st bloc in
the UN.
Tribal tensions and separatist tendencies
plague the fledgling nation. More than 700 lan-
guages are spoken, and many tribes are actively
hostile. Separatist sentiment is strong on the cop-
per-rich island of Bougainville, which feels it pro-
vides a disproportionate share of the country's
export earnings but is shortchanged on govern-
ment services. The recent surfacing of separatism
in Papua, where some 600,000 Papuans fear that
their interests will be prejudiced in a union with
some 1,800,000 New Guineans, has added a new
element of divisiveness. The territory's chief min-
ister, Michael Somare, has made some progress
toward forging a sense of unity by downplaying
contentious issues and attempting to develop as
broad a consensus as possible on specific prob-
lems.
Full independence is likely to come in mid-
1974, after the drafting of the constitution is
completed. Despite its eagerness to shed the un-
wanted role of colonial power, Australia is un-
likely to cast Papua New Guinea completely
adrift. Canberra's interest in having a stable neigh-
bor to the north will impel it to help the new
nation over initial difficulties.
New
Ireland
Bougainville
PAPUA
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Louisiade
Archipelago
554946 11
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EUROPE LOOKS TO NUCLEAR ENERGY
(03 fThe energy shortage has given new impetus established technology''fThe British, West Ger-
to the already strong European interest in estab-// mans, and Dutch have been working together
lishing their own capability for the production ofv~since 1970 to develop the centrifuge process. The
enriched uranium. The Europeans, particularly centrifuge takes about one tenth of the power
the French, attached great importance to inde- required for the diffusion process but is still un-
)' pendence in energy matters even before the oil proven for large-scale production?
crisis because of concern over the reliability of
supply and the price of enriched uranium from (,( rThe EC Commission, interested in seeing
the US. A 12.5 percent price increase and a US production of enriched uranium take place within
requirement that the Europeans commit them- a community framework, brought out a plan ear-
selves by the end of 1973 or mid-1974 to long- lier this month that attempts to reconcile both
term purchase contracts-extending through they ?centrifuge and diffusion advocates. The commis-
1980s-have given the Europeans an even stronger sion is recommending that the council support
incentive to move ahead on their own. If they ~0development of a European enrichment capability
went ahead and made long-term purchasing com- based initially on the gaseous diffusion process,
mitments elsewhere, there would not be an ade- but the centrifuge process would be phased in as
quate market for the output of any large-scale (gj it becomes commercially feasible The commission
European facilities) 4, reportedly also brought up the possibility of a
voluntary "buy European" policy to ensure an
(p'~ adequate market. The council has not yet dis-
[The Soviets have been conducting an aggres- cussed either proposal?
sive sales campaign that plays on European dislike
of exclusive dependence on the US. Within the c [trance last week decided to proceed unilat-
context of the Franco-Soviet relationship, Mos- erally without waiting for a community decision.
cow made a commitment in 1971 to process a It announced that it expected its diffusion plant
small amount of uranium for the French. This G3to be completed in 1979. According to plans
year, the Soviets have extended negotiations to a dating back to 1972, Paris would provide 47.5
number of other countries. Moscow stands to gain percent of the financing; Italy, 22.5; Belgium,
not only some limited political mileage ut also Spain, and Sweden, 10 percent each. The French
foreign exchange benefits from such sales expressed "hope" that the oth b f
er
h
(,.3 The Europeans are even less willing to accept
subst ntial dependence on the USSR than on the
US, however, and have wanted for some time to
construct facilities of their own. They have the
necessary scientific and technological skills, but
the huge investments required by modern nuclear
technology have mea t that no European country
could readily act alone
`' ~fechnology is an especially divisive question
for the Europeans. The French are the leading
lv~ has a proponents
price of
tag of $1.6 billion and would use
considerable electric power, but it is based on
mem ers o t
e
diffusion group would agree next month on fi-
nancing and a site, but Paris in no way hedged its
commitment on that possibility
~? ) he French announcement left the way
open for cooperation with the British-German-
Dutch project. Paris stated that its decision was in
accord with the proposals of the Brussels Com-
mission, that France favored close cooperation
between the rival processes, and that it was ready
to discuss what form these links might take. The
announcement also left the way open for possible
cooperation with the USI
(3 The uranium enrichment question will be
discussed at the summit of the Nine on 14-15
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December and may come up even earlier at the
EC Council of Foreign Ministers on 3-4 Decem-
ber. The French have already hinted that support
for a diffusion plant could make Paris more amen-
able on other EC issues, including over-all energy
policy. Whatever such promises or threats may be
worth, the French are certain to use the enrich-
ment issue as a test of "Europeanness.
One of Britain's largest mines
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Security Negotiations
PROBING CONTINUES
(,?kt the force reduction talks in Vienna last
week, the NATO allies outlined their proposal for
(pq a reduction agreement. In Geneva, at the Confer-
ence on Security and Cooperation in Europe,
- I little substantive progress has been made although
the pace has somewhat quickenedl
consider the allies' common-ceiling concept, but
only on condition that air forces are included'
(00 rThe Soviet side generally continues to dis-
pute the NATO contention that ground forces
and their e
ui
ment should b
th
f
f di
q
p
e
e
ocus o
s-
cussion, and to insist that air forces and nuclear
7
(,
fin Vienna, the allies formally suggested to
the Soviet Union and its allies what the Western
side desires in a force reduction agreement. Basi-
cally, the NATO allies propose two stages of
reductions, with Soviet and US ground forces
being cut in the first. The second stage would
involve reductions by other NATO and Warsaw
Pact ground forces to a common ceiling of about
700,000 men each .7
weapons be included. The NATO representatives
would like to use the remaining meetings before a
mid-December break to elaborate further on their
proposal and to criticize indirectly the Soviet
draft agreement presented on 8 November
Oq rn Geneva, the pace has picked up some-
what, with formal meetings being supplemented
by private sessions. Drafting of final documents
has not yet begun, but the conferees have started
to focus on what should be included. The Soviets
and their allies have not shown much give on
substantive issues, however, and a speedy reso-
lution of differences is riot anticipated. This phase
of the conference will probably last at least until
March of next year. The Soviets, who had pressed
earlier for a rapid conclusion, now appear re-
signed and even relaxed about the timing
p / initial reactions among the Soviet and East
4 /European
'/European delegates suggested a certain amount of
Their probing of allied delegates, how-
ever, confirmed the impression that one of the
W" Pact's major goals is to reduce national forces-
particularly the West German Bundeswehr-as
soon as possible. The chief Soviet delegate told
US officials that if the Bundeswehr were not
reduced, any agreement would be "intolerable" in
the eyes of the Soviet people and government.
THE ALLIES PROPOSE TWO STAGES
OF REDUCTIONS; THE COMMUNISTS
MAY ACCEPT IF THERE IS A PRECISELY
DEFINED LINKAGE BETWEEN THE TWO.
?a V1embers of the EC Nine have expressed
some chagrin over the US position on confi-
dence-building measures. West German officials
have requested US backing for two such iterns-
the exchange of observers at military exercises,
and the pre-announcement of maneuvers. Ac-
cording to the West Germans, they and their EC
colleagues are wondering whether the US wishes
to drop the entire idea of having such measures
discussed in Geneva. Further, they have cited a
danger that the US might become isolated and
71
(7 rStatements by Soviet and Polish delegates
suggested that the two-phase approach might be
acceptable if a linkage between the two phases
were precisely defined. The Western allies intend
to explore this interest further. A Soviet repre-
sentative also suggested that the Pact states would
that the alliance might split over the militar
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11
-7g With elections just four days away, the tradi-
tional Danish parti s have been dismayed by polls
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kO tThe three old non-Socialist parties probably
would form a coalition government if they win a
majority, which is unlikely. The most popular
alternative at this time appears to be a coalition
of these three parties and the Center Democrats.
Despite the severe losses the Social Democrats are
expected to suffer as a result of Jakobsen's de-
fection, they probably will remain the largest
party. Following the example of the Labor Party
in Norway, the Social Democrats might try to
form a minority government. The real problem
lies in the possibility that votes will be so dis25X1
persed that formation of a viable government will
prove so difficult that a len th interre num will
ensue.
that show large numbers of voters flocking to two Despite such incongruities, polls as recent as 22
parties appearing on the ballot for the first time. November showed Glistrup still running very well
The Center Democrats, an offshoot of Prime Min- in the provinces.ister Jorgensen's Social Democrats, were second
in a field of seven parties in one recent poll, and p'4 rErhard Jakobsen's moderate Center Demo-
the anti-tax Progressive Party was tied for third in crats, however, may succeed in taking c9nsidera-
another. Danish voters may reconsider before the ble votes away from the Social Democrats and
balloting on 4 December, but significant losses by possibly other parties as well. Despite the newness
the old-line parties seem certain7 of Jakobsen's party, he already counts a number
of tried and tested politicians among his support-
ers. Popular dissatisfaction with the Social Demo-
78 SThe campaign got off to a slow start, with crats might lead many Danes to back a party
the established parties urging voters to choose whose principal appeal is its desire to check the
"safety and security" rather than "a gamble with radical trend of Danish socialism. One report
the future." The three non-Socialist opposition 77claimed that even some of Glistrup's organizers
parties-the Conservatives, Moderate Liberals, and have joined Jakobsen's party
Radical Liberals-as well as the small leftist S
o-
cialist People's Party all concentrated on attack-
ing the economic situation.?
'O The governing Social Democrats may have
difficulty defending their domestic record in view
of the high rate of inflation and may stress their
foreign policy record instead. The opposition will
find holes here, too, and probably will cite Prime
Minister Jorgensen's inept diplomatic style-most
recently, his alienation of the Arabs by expressing
strong public support for the Israelis. Growing
popular concern about fuel supplies will fur-
ther damage Jorgensen and the Social Demo-
crats. Although the government's performance
while holding the EC Council chairmanship for
the past five months showed imagination and
ability, membership in the EC is no longer as
popular as it once was with the Danish electorate'j
]~ [The pre-election popularity of iconoclastic
IVlogens Glistrup, founder of the anti-tax Progres-
sive Party, may fade in the voting booth. Glis-
trup's latest gambits include a proposal to re-
duce the cabinet to eight ministers; in which he
would hold the position of "Minister for Liquida-
tion of Public Activities." He told an audience
recently that Danes had nothing in common with
Greenlanders and suggested the latter seek affilia-
tion with either Canada or the US "so that we are
rid of some bureaucracy." Furthermore, Glistrup
faces charges on tax evasion and fraud, and is
expected to be brought to court in January.
Danish Popular Opinion in November
Party
Sept. 1971
Election
Observa
Poll
Borsen
Poll
Social Democrats
37
22
21
Socialist People's
9.1
9
8
Center Democrats
-
16
10
Radical Liberals
14.3
14
15
Moderate Liberals
15.6
12
11
Conservatives
16.7
11
12
Progressives
--
10
12
Other Parties*
7.3
6
11
*Includes the Danish Communist party, which is expected
to gain representation for the first time since 1960.
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YUGOSLAVIA-ROMANIA: AT ODDS
V' [During his two days of talks in Be grade this
week, Romanian Foreign Minister Macovescu
apparently failed to resolve differences over the
g3 Middle East that now threaten the -traditional
friendship and cooperation between the two
countries
determine whether the next Tito-Ceausescu meet-
ing, contemplated for December, will be post-
poned7
g2 YMiddle East issues probably dominated the
discussions. While Belgrade has strongly sup-
ported the Arabs, Bucharest has carefully main-
y2 rMacovescu's trip seems to have been hastily tained an even-handed approach. From the Yugo-
arradged. It was announced only two days beforeV slav point of view, Romanian mediation attempts
he arrived in Yugoslavia, and was billed as a have detracted from Tito's efforts to ply a major
"working visit"-wording that suggests no formal role in finding a solution to the conflict
communique will be issued. The Yugoslav press
described the portion of the talks dealing with
bilateral issues as "warm and friendly," but the 4'Z fTito's visit tc the Soviet Union two weeks
standard mention of unanimity on in-:ernational `' ago dust also have caused concern in Bucharest.
affairs was missing. The depth of differences will d The Romanians cannot be happy with the com-
h; I d d a formula
e
h
Tito and Ceausescu
In pleasanter times
it Inc u
munique Tito signed, w
praising mutual "trust and confidence" but
omitted references to respect for national integ-
rity and party equality that have been standard in
both countries' dealings with Moscow. Macovescu
was probably interested in finding out how much
support Bucharest can still expect from Belgrade
in future ideological duels with the Soviets.?
V )~olicy differences have also arisen over the
Sino-Soviet dispute. The Yugoslav party is telling
other Communists that it is planning to back-
g3 pedal from its prominent opposition to the Soviet
stand on China because good relations with
Moscow are more important. The Romanians, by
contrast, are determined to stick to their position
on China, and may see Belgrade's shift as a sellout
of bilateral understandings.
?3 VBoth countr;es have so far muted public
displays of disagreements. In the past, each has
relied on the other for support, and they would
be reluctant to formalize the disagreements by
explicitly bringing them to public attention.
Ceausescu in particular does not want to create
the impression that his initiatives have isolated
Romania.
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PAKISTAN: AFTER THE FLOOD
)The economic impact of floods late list sum-
mer~'is less severe than had been feared by the
government. Principal export crops escaped seri-
ous damage, with the cotton harvest down only
slightly and the current rice crop apparently head-
ing for more than the record 2.2 million tons of
last year. Since prevailing market prices are high,
export earnings should top the billion dollar
mark, an increase of more than 25 percent over
last fiscal year.
Although the flooding left some 8 million
people homeless, there was little damage to stand-
ing crops. In many areas, in fact, rice crops were
improved by the inundations, while a fertile layer
of silt now covers many of the fields being sown
to wheat. The government is urging farmers to
increase food grain acreage and as an added incen-
tive is promising higher procurement prices. To-
gether with the priority accorded to government
efforts to repair flood-damaged irrigation systems,
this gives a favorable early outlook for spring
wheat.
trolled ration shops.
ing of government deficit financing and by the
availability of more grain in government-con-
A good wheat crop following the heavy cot-
ton and rice harvests will ensure economic growth
on a par with the 6.5 percent achieved last year.
Inflationary pressures have been eased by a slow-
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q1 Y Despite President Juan Peron's rally from his
, , recent congestive heart failure, he has aeen forced
to curtail his personal diplomatic offensive. His
IL health remains delicate, and the latest setback has
raised new doubts about his ability to ~3overn7
q rPeron's doctors and chief advisers have been
qq
publicly optimistic regarding his chances for re-
covery. In private, they apparently have per-
suaded him that he must limit his official duties
and that any extensive travel might be fatal. Even
Foreign Minister Vignes, who had been pushing
hard for a visit with President Nixon, reportedly
now recommends against it. Although Peron still
wants to come to the US, it is unlikely that he
will have recovered sufficiently to address the
UN, the pretext for his trip, before -:he General
Assembly closes on 19 December. Indeed, the
ambassador-designate has informed US officials
that tl,1e request for the UN visit has been with-
drawn(
93 Tif Peron dies suddenly or is incapacitated for
Y an extended period, it is unlikely that his wife
d t't +'. I V D 'd t M
lq~
an cons I U ona successor, Ice rest en aria
Estela Martinez de Peron, will be able to retain
power for long. Although Peron is allowing her to
perform diplomatic duties and assume limited
executive authority during his convalescence, she
has shown few political talents and has little sup-
port within the Peronist movement. If she resigns
or is forced out, it is not clear who would be next
in line. Although the constitution provides that
succession should go to the head of the Peronist-
dominated Senate, the current leader is only a
temporary stand-in. Consequently, the presidency
would revert to former provisional chief Raul
Lastiri, who still heads the Chamber of Deputies
q' (Such a constitutional successor might not be
able to last until elections could be called-if,
indeed, he could even be put in office. There is no
single Peronist leader sufficiently strong or
popular to gain command of the Peronist move-
ment peacefully. A violent struggle for control of
the government and the movement would be
likely. Even before Peron's attack on 21 Novem-
ber, a number of armed groups from the left wing
of the Peronist movement indicated that they
would attempt to take advantage of the situation
if Peron should dic in office
G/ii fA violent struggle for power would hasten
he re-emergence of the military as the ultimate
political arbiter. The generals undoubtedly are
working on contingency plans to take over in the
event of widespread_ bloodshed.
CUBA: CRITICISM OF PERON
a-?7t Jfhe Castro regime is showing increased signs
of apprehension over recent trends in Argentina.
The Cubans, who never completely trusted Peron,
now see their old fears being confirmed
qg (Although Havana's expectations were raised
by the establishment of diplomatic relations last
May and the subsequent granting of Argentine
credits to Cuba, recent developments such as the
anti-Marxist campaign and the visit of Bolivian
President Banzer to Buenos Aires apparently have
convinced the Cuban leadership that Peron has
shifted to the right. They see these developments
as a direct result of the Chilean coup, which was a
setback for Cuba, and they fear that they may
suffer a second major reversal in Argentina.1
14 These concerns have been reflected primarily
in the government-controlled media, which have
steadily increased criticism of Peron since mid-
7October. In its 19 October issue, Bohemia maga-
zine, which has a fairly wide circulation in Latin
America, censured the crackdown on the Argen-
tine left following the terrorist assassination of a
high Peronista official. Havana's displeasure was
elaborated further in a recent domestic radio
broadcast that denounced Peron's actions as a
shift to the right, and accused him of "repressing
the left." Such actions are unjustified in Havana's
view because Peron regained power with the ac-
tive support of the radical left. The critique con-
cluded with a reminder to Peron that the left can
make things as difficult for him as it did for the
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previous military governments if he moves too far
to the right.7
Despite its concern over Peron's current poli-
es, the Cuban leadership is probably even more
worried about its relations with Argentina after
Peron leaves the scene. There is apparently con-
siderable pessimism in Havana over Peron's age
and physical condition. Havana is taking advan-
tage of current trade opportunities, and it will
probably avoid any major shifts in policy. At the
same time, it is probably laying the groundwork
for maintaining contact with agents, guerrilla
bands, and leftist groups in anticipation of a oos-
BOLIVIA: BANZER GOVE LAMENT S LIT
la!
President Banzer is fa ng his n st severe
9 test ince he took power in a coup two years ago.
The civilian-military coalition that has served as
his political base is already weakened by internal
splits and personal rivalries. The Nationalist Revo-
lutionary Movement, Bolivia's largest political
party, is on the verge of moving into open opposi-
tion. If it does, the President will be left with
only the small-and deeply divided-right-wing
Bolivian Socialist Falange, and with senior mili-
tary officers who are in many cases alienated
from their juniors and cannot count on their
support.
The immediate problem is the makeup of
Banzer's new cabinet. On 26 November, Banzer
announced that he would not be a candidate for
president in the next election, implied that the
election would not be held on schedule, and
named a "technical" cabinet to lead Bolivia out of
its economic troubles.
The Nationalist Revolutionary Movement re-
ceived a reduced allotment of ministers in the
new cabinet, and even those were from a faction
that does not support party leader Victor Paz.
When Paz' protests were ignored, he pulled his
party out of the government. The appointed min-
isters stayed on in their jobs, however, and were
subsequently expelled from the party. Although
there are reports that Banzer was trying to force
the Movement out of the coalition, it appears
more likely that the President miscalculated Paz'
reaction. In any case, the Movement was caught
by surprise, and party leaders are still trying to
assess the significance of their new position.
Banzer's coalition is made up of old enemies
who have feuded for most of a lifetime and were
brought together only by a desire to gain power.
An eventual split was virtually inevitable. During
the early days of his government, Banzer could
force them to submerge their differences and
work together. Now, after two years of rejuvena-
tion, the Movement probably feels strong enough
to strike out on its own and slough off the politi-
cal liabilities of close association with the former
oligarchs, corrupt businessmen, and arch-conser-
vatives who support Banzer. It still lacks strong
influence in the military, the ultimate arbiter of
Bolivian politics, but its position is improving as
time takes its toll of older, conservative officers.
In addition, party leader Paz aspires to another
term as the country's president, and he may be-
lieve that detaching himself from present Bolivian
policy will improve his chances if an election is
eventually held.
Given the Bolivian capacity for compromise,
all parties may yet decide that it is best for the
moment to paper over the deep rifts within the
government. The rifts will remain, however, and
will have a significant adverse effect on the sta-
bility and life expectancy of the Ran7t- re-
gime. 25X1
Dominican Republic
SPOTLIGHT ON BOSCH
2 O2 5uan Bosch's sudden resignation from the
party he has led for over three decades has
provided a spark to the otherwise dull campaign
for the presidential election set for next May.
Bosch's move, although designed to secure a
totally obedient power base, is more likely to
play into the hands of President Joaquin Bala-
guer, who intends to run for a third four-year
term. Z
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1 O osch's announcement on 19 November that
he was leaving the Dominican Revolutionary
Party-which he founded in 1939-caught both
his friends and enemies by surprise. Although
there was no real threat to his predominance,
some in the party had questioned hi:; autocratic
control of even minor details, and Bosch is not
one to tolerate any criticism at all. Several leaders
of the old party and a large part cf its youth
sector have followed Bosch into a new party
subsided, but new demonstrations by students
were reported on 28 November?
o(. The strikes, affecting three major cities in
the south, began after the government arrested a
large number of radical teachers who were pro-
testing the administration's refusal to recognize
their union. By mid-November, the demonstra-
tions had developed into a broader confrontation
ith the military regimea[One of the demonstra-
Ib ors' primary targets, for example, was the Cuzco
t [Both Bosch's new Dominican Liberation headquarters of SINAMOS, the government's
Party and the remnants of the old party are 10(omass mobilization organ izatioJ The government,
continuing contacts with other parties in the hope } fearing the strikes would spread to other cities
of putting together a coalition that could unseat and that more powerful opposition groups would
Balaguer. This will be an extremely difficult task,IOljoin in, apparently decided to negotiate a com-
as there are about 15 parties that range from promise. The limited force used by the authorities
extreme left to far right and share only a desire to thus far has done little more than incite the
replace Balaguer. Bosch's proposal for a "Govern- rioters, however, and at least seven persons have
ment of National Dignity" as a coalition platform now been reported killedi
has gotten only a lukewarm reception, with the
conservatives considering it too radical and the (DC. Ithough there has been no evidence linking
leftists believing it does not go far enough. In the )test disturbances to external events, some
addition, the leaders of most parties in the poten- Peruvian leaders undoubtedly will see a connec-
tial coalition are ambitious men who will fight to tion with the coup in Chile last September. The
gain the nominations for president and vice presi- government is concerned that Allende's over-
dent for themselves, and in the event of a victory throw will encourage opposition groups in Peru.
~ over Balaguer, would want to control the alloca- The uncertainties raised by events in Chile and
t",y__11 tion of cabinet seats and government jobs? the trouble in the south are likely to have further
effects on the -egime's domestic policies, and
harsh measures against critics are likely to continue,
25X1
25X1
10 P3alaguer himself has not madE! any public
statements about the opposition's problems in
achieving unity. Since he will not be officially
designated as his party's candidate at least until
February, he has plenty of time to use money
influence to win over opposition politicians.
PERU: TRUCE FALTERS
~o'l, 111 rocked hsouthern anti-government 15 November had
list. [President Velasco's surprise announcement
that Prime Minister Mercado would retire in 1975
L_ _..L.., Finance Minister Morales
and
Bermudez probably served two purposes. For
one, Morales Bermudez is one of the more moder-
ate ministers, and is well respected, particularly in
international financial circles. At the same time,
his promotion to prime minister - designate (he
will spend next year as army chief of staff) will
deflate Mercado's hopes of succeeding as presi-
dent, which he probably would have done had
Velasco died earlier this year. Mercado's appoint-
ment, however, is not likely to rest well with
some "radical" government leaders.
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IThe world rice harvest now under way (ex-
cluding China and North Vietnam) is likely to
produce approximately 200 million tons, about
equal to the record set in the 1969/70 crop year.
Because production declined during the three in-
tervening years, stocks in all countries are low,
import demand has not been met, and prices have
risen sharply. Although the current harvest will
bring temporary relief, it probably will not be
enough to rebuild stocks and more shortages are
likely by mid-1974.
The excellent rice crop this year is largely a
result of good weather in Asia and increases in the
area planted to rice around the world. Most rice is
consumed in the producing country, and less than
5 percent normally enters international trade, so
that even minor shifts in production or stock
levels can have a large effect on world market
prices. Such a shift occurred in 1972, when the
world rice market moved from one of readily
available supplies to one of shortages. By mid-
1973, stocks had reached their lowest level while
prices were setting record highs. As a result, many
importing countries had to use other grains to
feed their populations.
Although prices have fallen recently and
probably will continue to decline through early
1974, world demand is likely to outstrip supplies
and prices will rise again before the next crop
becomes available. Demand for rice exports from
the US on easy credit terms will continue to be
high, but such purchases could drive prices up.
Conditions in the rice market next year
could be eased measurably if China increases rice
exports as it did in 1966 and 1967, when world
prices were unusually high. Peking reportedly has
increased imports of wheat and corn this year to
free large quantities of rice for export.
For most countries, rice output depends
primarily on the weather. If conditions are aver-
age, output in Asia during the next several years
will increase at an average of about 3 percent
annually, a rate barely sufficient to keep pace
with population growth and provide modest im-
provements in diets. A number of countries-such
as Bangladesh, South Korea, and Indonesia-will
continue to be heavily dependent on imports,
especially in years of poor crops.'
WORLD TRADE TALKS CONTINUE
CIIy -11'1)
\fter A ling the mul ilateral trade nego-
tiations in Geneva for a month on the issue of
separate agricultural and industrial discussions,
there are indications that Paris may be willing to
accept a compromise, which will allow committee
work to proceed. The French remain adamant on
the establishment of a separate agriculture sub-
committee, however.
To end the deadlock, the EC Commission is
proposing that subcommittees, including a sep-
arate one on agriculture, be set up to begin work
on specific, technical tasks. The commission is
also proposing that once negotiations begin, con-
cessions can be exchanged among the subcom-
mittees. The commission's proposal is similar to
one suggested by the Japanese and accepted by
the US and most other non-EC members at the
earlier committee meeting. If Paris accepts this
compromise, the US, the EC, and Japan will be
asked to agree on a work program that could be
ratified by the full committee in mid-December.
If approved, detailed work could begin in Janu-
ary.
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