WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A010700080001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 21, 2016
• Document Release Date: January 2, 2008
• Sequence Number: 1
• Publication Date: March 8, 1974
• Content Type: SUMMARY

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Secret
Weekly Summary
DIA review Secret
completed. 8 March 1974
State Dept. No. 0010/74
review completed
ARCHIVAL RECORD Copy N2 75
TU-R
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PLEASE RE
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CONTENTS (March 8, 1974)
d:KL_Y SUMMARY, issued every Friday morning by
of the week throt#ith noon on Thursday. It
-,nomic Research, the Office of Strategic
Directorate of Science and Te= hnningy.
(I more comprehensive-,treatment and therefore
LAST ASIA
PACIFIC
MIDL)LE EAST
AFRICA
i ,rael: Syrian Intentions; New Government
2 ISSR: Gromyko's Middle East Travels
3 Ethiopia: The Emperor's New Politic s
b Vietnam: A Spate of Spats; Delta
e Indonesia: Stockholders Report
/ Cambodia: The Lull Goes On
8 Korea: Problems Persist
'J Japan's New Export Drive
11) I ran-Iraq: Border Situation
ii Iran: Expanding Naval Forces
.2 North Yemen: A New Cabinet
t3 India: Election Returns
14 Tunisia: Propping Up Bourguiba
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17
17
18
2'0
CSCE: Air of Optimism
EC: Attitude on Energy Coordination
Norway
!USSR-France: Patching Things Up
French Cabinet Streamlined
IUly: Putting It Back Together
_'2 Portugal: Clash Over African Policy
WESTERN
HEMISPHERE
2 i Argentina: Cordoba Situation
=-'..S Guatemala: A Stolen Election
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SEC'HI F
ISRAEL '
Concern Over Syrian Intentions
(0 frhe Israelis are responding to reports of
Syrian military preparations on the Golan front
that seem to increase the chances of a new round
of fighting Damascus reportedly is concentrating
=units near he Israeli-held salient with the inten-
tion of attacking Israeli ositions
Tel Aviv is said to be worried over Syrian
troop concentrations near the cease-fire line, as
well as indications that President Asad is coming
under pressure from extremists for having re-
leased the Israeli POW list. The Israeli cabinet met_.,
in an extraordinary session on the night of March
4 to discuss the situation. On March 7, the Israelis
refused to permit a UN mail truck to pass through
their lines, suggesting that they may be making
preparations of their own. The Israeli press re-
ported on March 6 that Israeli units in the Golan
Heights are on alert
A Government At Last
~~ Prime Minister Meir finally succeeded in
forming a new government this week, more than
two months after general elections that reduced
the parliamentary strength of her Labor Align-
ment. With Defense Minister Dayan's last-minute
decision to join the new cabinet and with the
National Religious Party's decision to participate
in the coalition, the new government emerged
with a majority in the Knesset./
Mrs. Meir told President Katzir on March 6,
just hours before her extended mandate was due
to expire, that she had formed a government. The
key development that opened the way was the
agreement, announced the night before, of Dayan
and his Rafi faction colleague, Transport and
Communications Minister Peres, to serve in the
new cabinet. They attributed their change of
heart to the new military situation on the Syrian
front, which they said necessitated the formation
of a cabinet as soon as possible'
-1 `_ Similarly citing the "serious situation" on
the Syrian front, the National Religious Party
reconsidered its stand and voted to join the gov-
ernment. Some additional negotiations with the
Prime Minister are apparently planned, however
.1
(Party leaders had been inclined all along to enter
the coalition on the basis of the compromise
worked out earlier on the disputed religious issue.
Until now, however, they had hesitated to over-
ride the objections of the party's orthodox youth
wing and the advice of Israel's High Rabbinical
Council
ISRAEL-EGYPT: DISENGAGEMENT
`Israel and Egypt on Mac/cY~ ~ successfully
concluded their disengagement agreement, 24
hours ahead of schedule. Israeli forces have
pulled back to a line 15-20 kilometers from
the Suez Canal, where they retain control of
strategic Mitla and Gidi passes. Egypt now has
control of the canal for the first time in
almost seven years. A UN buffer force pres-
ently numbering 2,000 men is stationed in a
narrow strip separating the two tirJPc nn tha
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)Earlier in the week, Mrs. Meir angrily walked
out of an emotion-charged Alignment caucus
called to discuss her cabinet nominees. Upset over
the continued wrangling displayed at the meeting,
Mrs. Meir announced she was giving up her efforts
to form a government. Only repeated personal
appeals by other Alignment leaders persuaded her
to reverse her decision.]
Domestic critics will cite the similarity
between the new cabinet and its predecessor as
evidence of further hardening of political arteries
in Jerusalem. Only five new faces were among the
16 ministers named by Mrs. Meir. The most note-
worthy of these is Yitzhak Rabin, former chief of
staff and ex-ambassador to the United States,
who becomes labor minister. Rabin's views on
US-Israeli -relations are reportedly respected by
Mrs. Meir.
I (Three cabinet posts-religious affairs,
welfare, and interior-were left open for the
National Religious Party, which held them in the
old coalition. The post of transport minister is
also still unfilled and no mention was made of a
new communications minister. President Katzir
has given Mrs. Meir until March 10 to fill the
vacancies. She also plans to present the new gov-
ernment to the Knesset for a vote of confidence
on that dater
\No significant change in Israel's peace nego
tiating position is likely to result from the forma-
tion of the new cabinet. Barring new fighting,
Mrs. Meir remains prepared to enter the projected
disengagement negotiations with Syria, but she
apparently believes that her mandate to conclude
far-reaching agreements is limited. She has already
publicly promised, for instance, that on issues
such as a Jordan West Bank settlement, the gov-
ernment will call for new elections before signing
an agreement.
USSR: Gromy-ko's Middle East Travels
_., 'Foreign Minister Gromyko arrived in Syria romyko sought to stir Egyptian suspicions
and Egypt hard on the heels of Secretary Kis- of US intentions, warning that the Arabs should
;singer. A major purpose of the Russian's travels be wary of those who want to substitute "partial
was to give the appearance that, in contrast to solutions" for a real settlement and who want to
Kissinger's previous round of personal Middle ._'-'drive a wedge between the Arabs and their
East diplomacy in January, this time Moscow was "allies." These sentiments were not echoed in the
in the. thick of things. In both Damascus and communique, indicating that Cairo does not want
Cairo, Gromyko stressed that the Soviets expect to set back its budding relationship with the US
to be closely involved in future Middle East peace or upset prospects for peace.i
negotiations and urged that the talks be returned
to Geneva, where the Soviets could play a major
role.!
jGromyko's admonishments did not appear
to move Cairo. As they did after Foreign Minister
Fahmi's visit to Moscow in January, the Egyp-
tians made a bow in the joint communique to the
"importance and necessity" of Soviet participa-
tion in all stages of the Middle East peace talks,
but they did not appear to make any new com-
mitments.!
~romyko sought to check the deterioration
in Moscow's relations with Cairo, but apparently
without success. He emphasized that a "drifting
apart must not be permitted" but implied that
the Egyptians should take the initiative to im-
prove relations. The communique made no
mention of bilateral economic or military
matters, suggesting that these questions remain
unresolved. The Soviets did pledge to assist with
opening the Suez Canal, but only "in principle."
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V In Cairo, Gromyko also met with Palestinian
leader Yasir Arafat. This is the first meeting
between a top Soviet leader and a fedayeen to be
acknowledged by the Soviets. It represents a small
step toward formal recognition of Arafat as
representative of the Palestinians]
Information is scant on Gromyko's discus-
sions in Syria, but they were sufficiently difficult
as to require his return to Damascus for another
round of talks after his Cairo visit. Press reports
from Damascus state that Gromyko has been
urging the Syrians to go to Geneva rather than
Washington to conduct indirect disengagement
negotiations with Israel. Such a demarche would
be consistent with Soviet intentions to break the
US monopoly of the peace talks, and play a more
active ,.dole in the negotiations.
Ethiopia
THE EMPEROR'S NEW POLITIC?
(1 JC_ Z^JRC r_a)
Ethiopian politics are undergoing a major
transformation as the regime attempts to cope
with continuing civilian and military unrest.
Emperor Haile Selassie on March 6 announced
plans to introduce far-reaching constitutional
changes, including curbs on his own authority.
With the exception of a few scattered units,
rebellious troops have returned to their barracks
after forcing the appointment of a new govern-
ment of younger and more progressive members
of the Ethiopian hierarchy. The country remains
restless as different groups, emboldened by the
military's success in gaining pay raises, press for
satisfaction of their special demands. Should this
situation continue, the new administration's
ability to govern will be seriously challenged.
On March 7, 85,000 members of Ethiopia's
normally docile labor confederation began a gen-
eral strike in support of a 16-point list of de-
mands including a sizable wage increase and
greater protection for labor's right to strike and
organize. Labor leaders do not appear to be trying
to bring down the government and reportedly
have told strikers to stay off the streets. Militant
students, however, are taking advantage of the
strike to demonstrate against the government, and
their protests could easily lead to violence.
Striking teachers, meanwhile, continue to press
demands for salary increases and new educational
policies.
Haile Selassie, in a nationwide address on
March 6, said he had directed Prime Minister
Endalkatchew to call a constitutional conference
to draw up new arrangements that will make the
prime minister responsible to Parliament, guar-
antee civil rights, streamline court procedures,
and clarify relations among the branches of gov-
ernment.
The promised constitutional changes would
curtail the virtually unlimited authority of the
Emperor and place Ethiopia on the way to
becoming a constitutional monarchy. The
Emperor and his closest associates have rec-
ognized that political change is necessary, but
hope to control its pace and general direction.
The writing of a new constitution will take time,
and the new arrangements may be resisted by
powerful nobles who fear a threat to their priv-
ileged position. Dissident groups will become
impatient if the process becomes protracted, and
they will be sensitive to any signs that the regime
is not committed to establishing a more demo-
cratic form of government.
A majority of military dissidents still seems
willing to give the new government a chance.
Endalkatchew secured their support by appoint-
ing a cabinet of experienced, well educated min-
isters who are sympathetic toward the reforms
sought by the military. The new ministers have
held a variety of government and diplomatic
posts. With few exceptions, they are not closely
identified with the discredited former govern-
ment.
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Two of the most prominent representatives
of the progressive movement among the Ethio-
pian aristocracy received important posts at the
insistence of the military. Mikael Imru, Ethiopia's
representative to the European UN office, was
named minister of commerce and industry.
Zawde Gebre Selassie, Ethiopia's UN ambassador,
was appointed interior minister. Both have fre-
quently advocated reforms similar to those
demanded by the dissident troops, and as a result
have been at odds with Haile Selassie.
The Emperor
Addressing the troops
lappointment of Lieutenant General
Assefa, the former armed forces chief of staff, to
the post of minister of civil aviation and tourism.
Abiye, the new defense minister, are the only
military men in the cabinet. In an effort to main-
tain some continuity, Endalkatchew reappointed
Minassie Haile as foreign minister.
The constitutional changes and the composi-
tion of the cabinet represent a serious effort by
the regime to begin dealing with the underlying
causes of the disorders. Many civilians, however,
are skeptical of the re ime's intent to follow
through on its promises.
The new government must cope with several
immediate problems. Because of limited financial
resources, it is unable to meet economic demands
by workers and teachers, a constraint that was
instrumental in the regime's decision that it must
instead make political concessions. The pay in-
creases granted dissident troops to end their
revolt have already seriously strained the budget
and at the same time encouraged civilians to
assert claims for an improvement in their eco-
nomic condition.
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9
more pointed editorial seemed aimed at Hanoi's
North Vietnam's relations with China and principal Communist allies, the Soviet Union and
the Soviet Union continue to be marred periodi- China. Both countries have muted their support
cally by irritating incidents that reinforce Hanoi's of Hanoi's propaganda campaign against the US in
skepticism over the long-term reliability of its favor of their own broader interest in detente)
Communist allies I cl Hanoi's Foreign Minister Trinh has also recently
voiced North Vietnam's dissatisfaction with the
_? Perhaps the most serious problem arose lukewarm support from Moscow and Peking.
when China drove the South Vietnamese out of
the Paracel Islands. North Vietnam has never
clearly claimed the Paracels as Vietnamese terri- ~ 'Such incidents, irritating as they are, do not
tory, but Peking's action placed Hanoi in an em- portend any fundamental near-term change in the
barrassing position: it could not openly condemn relationship Hanoi has with each of its principal
an ally, but neither could it acquiesce in the sponsors. Both the Chinese and Soviets appear
seizure of what many Vietnamese think of as willing to continue to provide large quantities of
their territory. In the end, the North Vietnamese economic aid, though probably less than Hanoi
merely urged goodwill on all sides and called for wants. Both still provide some diplomatic sup-
negotiated settlements of all such territorial port. But these incidents do keep the North Viet-
disputes..~ namese wary and suspicious
i;? There have been other signs of friction with
Peking. China failed to send delegations to North
Vietnam's recent trade union and women's con-
gresses, though virtually every other Communist
state, including the Soviet Union and Albania,
was represented.
X VBoth the Forei n Ministry note and the
There has been a marked step-up in Commu-
ni t- Initiated incidents in the delta provinces
south of Saigon, partly aimed at countering gov-
r, ernment efforts to establish a new district in an
area long under Viet Cong influence. The pro-
posed new district infringes on a Communist base
area in the tri-border area of Dinh Tuong, Kien
Tuong, and Kien Phong provinces. Fighting there
has been intense for the past two weeks. Commu-
nist losses appear to have been heavy, and a need
for reinforcements has caused the North Viet-
namese 5th Division north of Saigon once again
to move some elements back into the northern
delta
Hanoi is unhappy both with Peking and Mos-
cow~because of their positions on the conflict in
South Vietnam. On the first anniversary of the
International Conference on Vietnam on March 2,
North Vietnam's Foreign Ministry sent a note to
the conference members calling upon each by
name-including the Soviet Union and China-to
condemn US and South Vietnamese Government
actions in South Vietnam. On the same day 1`
Hanoi's authoritative newspaper Nhan Dan edi-; ,
torially demanded that "a number of countries
that are signatories to the act that have not yetd'
correctly implemented their obligations change .
their attitude. . .to prevent the US-Thieu clique
from sabotaging the Paris agreement."'
jIn recent weeks, Communist support units
have been crossing into the western delta from
Cambodia and in some cases traveling farther
south to the U Minh Forest. A number of skir-
mishes with government troops have occurred
near known Communist infiltration routes in the
delta, and several government outposts have been
attacked. Such incidents probably represent an
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effort to screen the moves of the infiltrating rear
service units`/
The flare-up in the delta has coincided with
a lull in activity in the central highlands. In Pleiku
and Kontum provinces, where heavy fighting con-
tinued from January through mid-February, both
sides now are restricting their operations to hold-
ing actiortMoreover, anticipated Communist at-
tacks in QCiang Duc Province designed to draw in
South Vietnamese troops while larger attacks
were launched in Pleiku and Kontum provinces
have not materialized. Instead, several Communist
units recently moved from Quang Duc into north-
ern Military Region 3. This appears to rule out
25X1 any further heavy fighting in Quang Duc, unless
the government revives its previous attempts to
25X1 retake two border outposts lost last fall.
i_I 'President Suharto will have an opportunity
at a 'conference of the top 250 military officers
this week to determine how the military, and
particularly the army, rate his stewardship. The
meeting is especially important because of recent
displays of rivalry among Suharto's military sub-
ordinates and increasing signs of social discontent.
The officers, who gather periodically, will also
discuss the role of the military in the second
Five-Year Plan beginning in April.f
fuharto seeks and needs assurance of firm
military support before he takes additional steps
to deal with student activists or to stop rivalry
among military leaders. He will also be trying to
patch up military unity to prevent the disagree-
ments that have recently appeared within the
Jakarta ruling group from extending further into
the ranks. Growing speculation among the public
about military disunity is ominous for Suharto
because it may lead to doubts about the long-
term stability of his government and encourage
dissenterst
j Officers from the three Java divisions fill
mos important government positions, and their
intradivisional rivalry has traditionally provided
the dynamics of army politics. Since assuming
power, President Suharto has sponsored several
military reorganizations aimed at dissolving these
bonds of divisional loyalty. His success has been
limited.
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CAMBODIA: THE LULL 5;OES ON
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7The Khmer Commu is s may not bye able to
mount another major offensive against Phnom
Penh's defenses in the near future. The insurgents
evidently are having difficulty replacing personnel
they lost in the first two months of the present
dry season. Although more reinforcements ap-
parently are being earmarked for the sector north-
west of Phnom Penh, their numbers may not be
adequate to offset steady casualties, sickness, and
desertions. Communist losses south of the city
have not been so extensive, but many units in
that area saw heavy combat elsewhere last fall.
~, 'V he need to stockpile new munitions near
the !front lines and to overcome difficulties in
tactical coordination may also be affecting offen-
sive plans. In addition, the Communists may soon
have to divert some of the forces from the Phnom
Penh region to other areas where they have been
losing territory and population to aggressive
forays by local government units.
The Cambodian Army has sustained clearing
oper tions north and south of the capital against
spotty resistance. Government forces near the
center of Phnom Penh's southern defense line
received a brief barrage of insurgent 105-mm.
howitzer fire on March 4, but most of the shells
fell short on Communist-controlled territory. On
March 6, the Communists interdicted a section of
Route 1 some 15 miles southeast of the capital.
Twenty miles west of Phnom Penh, a multibat-
talion government force continued its effort to
reopen a stretch of Route 47T
37-~/The sharpest fighting of the week occurred
and the isolated southwestern provincial capi-
tal of Kampot, where the insurgents launched
their most serious thrust against that city to date.
Before their advance was halted on March 3 by
government air strikes and fire from Cambodian
Navy patrol boats, the Communists moved to
within two miles of Kampot and its airporf:j
The military high command in Phnom Penh
rec d quickly to this new threat by airlifting a
substantial number of reinforcements to Kampot
from the capital and from the navy base at Ream.
By midweek, the situation at Kampot appeared to
A Cambodian grenade launcher
One in the breach, one in reserve
be stabilizing as government troops began trying
to extend the city's defensive perimeters.
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!Attacks on South Korean fishing boats by
Pyongyang last month have helped intensify
polemics between the two Koreas, illustrating
their persistent antagonism and the formidable
obstacles to improving relations despite more
than two years of bilateral negotiations. South
Korea has gained the most politically from the
fishing incident so farl,
posture in the North-South talks could also hurt
its standing in the UN as it begins the annual
campaign for support against Northern demands.
In recent years, the South has sought such sup-
port on the basis of its commitment to unifi-
cation through negotiations between North and
South!
Pyongyang Responds
The loss of the boats-one sunk and one
captured-has given Seoul a striking example for /Pyongyang's response to the South's tactics
its nationwide campaign about the increased has been guarded, suggesting an awareness that
North Korean threat. The Pak government has the naval action was a political mistake` lIt has
also been quick to make the incident the central predictably sought to divert attention from its
issue in recent talks with North Korean repre- own involvement and to place the blame on Seoul
sentatives at Panmunjom, where-by employing by alleging that the South Korean fishing boats
tough and uncompromising language--it was able were actually on a spying mission. Pyongyang has
publicly to demonstrate firmness with Pyong- published confessions of crew members to sup-
yangi port this claim and otherwise stepped up its pub-
This was particularly evident at the February
27 meeting of vice co-chairmen of the South-
North Coordinating Committee. Seoul's spokes-
man laid down a five-point demand for satisfac-
tion regarding the incident. He warned that
Pyongyang's failure to comply would signal that
the North does not intend to continue the talks in
this forum. The South Korean also used this oc-
casion to reveal publicly that North Korean leader
Kim II-sung had admitted privately to certain top d.
South Korean officials in 1972 that Pyongyang
had indeed dispatched the commando team that '
tried to kill President Pak Chong-hui in January
19681
eoul's actions appear to have had a favor-
able impact on the domestic situation from the
government's viewpoint, contributing to a re-
duction of overt political opposition and, thus, to
a better chance of avoiding serious unrest this
spring. Nonetheless, the South's hard anti-
Pyongyang line is not without pitfalls. By de-
liberately raising tensions vis-a-vis the North,
Seoul runs a risk of scaring off foreign investment
at a time when South Korea is pressing its search
for new western capital. Seoul's toughened
lic criticism of South Korean domestic affairs.
'c1 )Pyongyang has also recognized that Seoul's
eff( t to exploit the situation in the bilateral
negotiations could be turned to some advantage.
It has charged the South Koreans with provoking
the incident in order to frustrate progress in talks./
IAt the vice co-chairmen's meeting-as well as at a
February 25 session of North-South Red Cross
officials-Northern spokesmen tried to ignore the
naval incident, stressing instead Pyongyang's com-
mitment to unification. They offered proposals
for moving both sets of talks forward. Though
hardly concessionary, these were somewhat more
flexible than proposals tabled in previous meet-
ings of these groups. Premier Kim II-sung, in a
major statement on March 4, appeared to endorse
this approach`
/'The North undoubtedly anticipates that the
S oath will reject its latest proposals, and that this
can be used as additional "proof" of Seoul's
determination to block progress in the negotia-
tions and perpetuate "two Koreas." The North
leans on this argument in propaganda efforts to
encourage disaffection in the South and will press
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,,,,, S E C K E I
this line in support of its strategy at the UN later
this year.I
Despite the new tensions, both North and
South will continue to exploit their talks for
political and propagandistic advantage. Each has
offered proposals for additional meetings this
month. These are unlikely to be productive, par-
ticularly as long as Seoul feels the need to focus
domestic attention on the Northern threat and
Pyongyang, to openly encourage unrest in the
South. The talks could take on more substance,
however, as UN consideration of the Korean issue
nears and each party feels a greater need to stress
to other nations its adherence to the concepts of
peace and national unification in the Korean Pen-
insula.
JAPAN'S NEW EXPORT DRIVE
3n~, t'r t~7'
Japanese firms are scheduling large increases
in exports this year in spite of the slackening
economic growth or stagnation expected in most
countries. Within the past few weeks, at least one
major trading company, Mitsui-which handles 10
percent of the country's total exports-
announced a vastly expanded overseas marketing
plan for this year. Several leading industries, in-
cluding the motor vehicle, steel, and textile sec-
tors, are planning to raise export volume by 10-20
percent in contrast to the small increases en-
visaged last fall.
Underlying the higher export goals is an ex-
pected sharp slowdown in domestic demand,
arising from the energy crisis and normal cyclical
factors. With domestic demand weakening, Japa-
nese firms hope to maintain sales growth, profits
and employment levels by boosting overseas sales;
they pursued the same policy during the 1971
economic slowdown when Japan's export volume
rose an extraordinary 20 percent. It is unlikely,
however, that Japan can achieve a comparable
gain this year because Japan's international com-
petitive position has been weakened and because
slower economic growth in most of the developed
countries will depress foreign demand for Japa-
nese goods.
Tokyo is indirectly encouraging exports by
actively restraining domestic demand. Its policies
are geared not only toward controlling inflation
but also toward assuring that supplies are avail-
able for overseas markets. Tokyo would like to
see a substantial increase in export earnings to
help offset the anticipated rise of at least $11
billion in oil import costs this year. In any event,
the 10-percent depreciation of the yen since
October also will help boost exports by making
overseas sales more profitable as well as more
competitive in foreign markets.
Exports have gotten off to a fairly good start
this year. Overseas sales volume in January 1974
was an estimated 10 percent above the January
1973 level-in dollar terms the increase was 43
percent-and February apparently was another
good month.
Japanese firms will pay much greater atten-
tion to the US market this year than last. The
volume of sales to the US fell by an estimated 10
percent in 1973 because most industries were
straining to meet booming domestic demand or
found it more profitable to sell to countries
whose currencies had depreciated less against the
yen than had the dollar. Supply shortages in
many industries are now beginning to ease and
the yen's depreciation against the dollar since
October has increased the profitability of sales in
the US market.
Auto sales in the US are expected to register
a sharp gain this year even though overall US
demand for motor vehicles is weakening. Japanese
suppliers probably expect to be able to boost
sales here by around 200,000 units in 1974,
about a 25-percent increase. Although the steel
and textile industries also will be pushing US sales
more aggressively, weakening US demand and
competition from other suppliers will keep down
the volume gains. Other important growth items
in the US market this year will likely include
general machinery, precision instrument and
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IRAN-IRAQ: BORDER SITUATION
poradic fighting again broke out on the
I'raniAn-Iraqi border this week, and forces on both
sides remain in a high state of military readiness.
Tehran and Baghdad, however, are still endeavor-
ing to avoid serious clashes. Iran has played the
border problem in low key but has sent letters of
protest to Baghdad and the UN. Iraq, for its part,
has become increasingly preoccupied with the
Kurdish problem inside its own borders. The
scheduled arrival of UN Secretary General Wald-
heim's special investigator, whose name has been
sent to Baghdad and Tehran for approval, was
expected to help ease tensions somewhat.k
25X1
Iraq has also continued to reinforce border
troops in the Badrah-Mehran area, where Iranian
troops reportedly occupied several miles of Iraqi
territory following a serious clash on February
10.E
f j Early this week, fighting erupted near
Mehran and Qasr-e Shirin, about 75 miles to the
north. Tehran claims the clashes were precipitated
by Iraqi forces who fired on a number of Iranian
border posts. Military spokesmen in Baghdad,
however, contend that Iranian troops started the
fighting by using artillery against Iraqi troops.
JThe fighting apparently became more inten-
sive by mid-week, and some casualties were in-
curred b both sides.
that the Shah has
ordered his troops to increase the level of their
fire and not to confine themselves merely to
suppressive fire. Radio Iran claims that several
Iraqi infantry attacks across the border were re-
pulsed and that "heavy losses" were inflicted on
the Iraqis. These claims have not been con-
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IRAN: EXPANDING NAV A~LL FORCES,
Iran's five-year plan 72-197) 7 des(gned to
(2_ 9
mo ernize and enlarge its navy is moving ahead.
Purchases this year of two destroyers from the US
and six large guided-missile patrol boats from
France at a cost of over $600 million indicate the
seriousness of the Shah's intention to improve his
navy vastly.
Since the British withdrawal from the Per-
sian Gulf in 1971, the Imperial Iranian Navy has
become the dominant naval force in the area. The
acquisition of modern war ships, additional per-
sonnel, and improved training, have enabled the
navy to extend its function from defending
coastal areas to providing protection for Iran's
expanding sea communications through the Per-
sian Gulf and the Strait of Hormuz. The Shah
envisions a further broadening of Iran's defensive
frontier into the Indian Ocean to protect Iran's
vital oil lifeline.
Until the mid-1960s, nearly all of the ships
in Iran's modest navy were supplied by the US.
The buildup and modernization of the navy began
in 1966 when Iran ordered four British MK-5
destroyer escorts fitted with Seakiller surface-to-
surface missiles and Seacat surface-to-air missiles,
and 12 hovercraft. Ten of the hovercraft have
Year
Supplier
Ships Ordered
Status of Delivery
1966
United
Kingdom
4 Mark-5 guided-missile
destroyer escorts
12 Hovercraft
10 arrived in late
1960s
1967
United
Kingdom
1 Battle-class destroyer
1972
United
4 Hovercraft
Scheduled to begin
Kingdom
in 1974
1972
West
Germany
2 Cargo/Tankers
1972
United
2 Multi-purpose support
Scheduled for 1974-
Kingdom
ships
1976
1973
United
2 used guided-missile
Scheduled for fall
States
destroyers
1974
1973
United
May have ordered a
Scheduled for 1979-
Kingdom
Through-Deck Cruiser
1980
1974
United
States
2 Spruance-class destroyers
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JCI~I~.C I
arrived and are in service, giving Iran the largest
operational hovercraft fleet in the world. In 1967,
a British destroyer, armed with Seacat missiles,
was purchased.
In order to handle increasing logistic support
problems, contracts were signed with the UK and
West Germany in 1972 for support and resupply
ships. These ships will give Iran its first seagoing
supply capability for naval units stationed on
several Persian Gulf islands and for the ports on
the Gulf that lack adequate road or rail connec-
tions-
In 1972, Iran began a five year naval buildup
program designed to quadruple the fleet by 1978.
Four more British hovercraft, each equipped with
guided missiles, were ordered. In addition, Lon-
don reportedly agreed to build a through-deck
cruiser, configured with a flight deck capable of
landing V/STOL aircraft and helicopters. Two
small guided-missile destroyers are being refur-
bished by the US for delivery to Iran this year,
and a contract was signed in January calling for
the delivery of two more destroyers in 1978; the
contract also provides for the training of 2,000
men.
Most recently, the Shah ordered six French,
built La Combattante II missile-armed large patrol
boats from France. The contract, valued in excess
of $100 million, calls for France to incorporate
several modifications, including the installation of
the US STANDARD/HARPOON missile system,
Italian OTO MELARA gun-mountings and a
Dutch fire-control system. Once in service, the La
Combattante Its will more than offset the threat
of Iraq's OSA-class guided-missile patrol boats
and provide added protection for Iran's offshore
oil facilities.
Although the Shah is spending lavishly on
the navy, as well as on the other military
branches, problems still persist. Naval personnel
strength, which rose from 4,400 in 1967 to
13,000 last year, is scheduled to increase to
20,300 by 1976. The navy is having difficulty
assimilating the new equipment and the addi-
tional personnel. Selective recruiting programs,
implementation of modern personnel manage-
ment systems, increased in-country training pro-
grams, and the increased use of computers, how-
ever, are brightening long-term orosoects for a
technically comuetent navy.
(President Iryani appointed a new cabinet on
March 3 headed by Prime Minister - designate
Hasan Makki, a political moderate who has been
in charge of a caretaker government since the
removal of Saudi-backed prime minister Hajri
three weeks ago. Although about half of the min-
isters are new appointees, the shuffle probably
does not foreshadow significant policy changes.'
Makki has no personal following, and his
appointment caused little reaction in Sana. All of
North Yemen's important interest groups are rep-
resented in the new cabinet, probably ensuring
early confirmation by the legislative assembly.!
More important, the Saudis, whose financial dole
helps to keep the North Yemeni economy afloat,
are not expected to oppose Makki. King Faysal
had vetoed Iryani's preferred choice, former
prime minister al-Ayni; a final effort by Iryani in
late February to get the King to agree to al-Ayni's
return was unsuccessful.
\The appointment of the ineffectual Makki
downgrades the prime minister's post. Iryani is
also said to be planning structural reforms that
would give the four-man ruling Republican Coun-
cil greatly expanded authority over the ministries.
1Former prime minister Hajri retains his post
in the Republican Council, with new supervisory
responsibilities over financial and development
affairs. In this capacity, he will oversee the gov-
ernment's allocation of Riyadh's subsidy
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INDIA: ELECTION RETURNS
N~ vo u
Prime Minister G dhi's Ruling Congress
Party managed to secure narrow majorities in the
two most important of five off-year state elec-
tions held last month. The results are more a
reflection of the continuing absence of a viable
political alternative than an endorsement of Mrs.
Gandhi's party or policies.
The present depressed state of the economy
and the government's forecast of still worse eco-
nomic conditions did not permit Mrs. Gandhi to
woo the electorate with convincing promises of
early improvement. In fact, the opposition parties
had a field day attempting to capitalize on discon-
tent over inflation, scarcities, and corruption in
government. Under these circumstances, Ruling
Congress leaders could not risk relying primarily
on Mrs. Gandhi's charisma, as they had during the
height of her popularity in 1971 and 1972.
In Uttar Pradesh, India's most populous
state, the party spent large sums, carefully selec-
ted candidates with broad caste, community, and
minority appeal, and promised substantial federal
expenditures that would benefit all segments of
the population. With a high turnout of 60 percent
of the electorate and peaceful voting, the Ruling
Congress gained a thin majority of 215 in the
425-seat assembly; defections from the opposi-
tion could add to this total. The party is thus not
dependent on support by the pro-Moscow Com-
munist Party of India, with which it had made an
electoral alliance.
In Orissa, a much smaller state on the east
coast, the Ruling Congress eked out a plurality
and is forming a government with support from
Communists and independents. This marks a per-
sonal victory for Mrs. Gandhi and the local
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Congress leader, Mrs. Nandini Satpathy. A former
chief minister, Mrs. Satpathy has now been given
a second chance to hold together the factional-
ized Ruling Congress Party in Orissa.
The results in the three other elections, less
favorable to Mrs. Gandhi, will have little impact
on the government in New Delhi. Regional parties
won in tiny Pondicherry and in the northeastern
state of Manipur. In Nagaland, bordering on Mani-
pur, a pro-Congress tribal party lost control to
another tribal party. Inasmuch as the new state
government will be less closely associated with
the government in New Delhi, it may have a
better chance of eventually ending the long-
simmering tribal unrest in Nagaland.
During the difficult economic period ahead,
political instability in the states is likely to in-
crease as the population faces continuing food
shortages and high prices. The fall of the govern-
ment in Gujarat last month proved that even
Congress governments with solid legislative ma-
jorities are vulnerable. For the moment, however,
Mrs. Gandhi's confidence has been boosted as she
~'Y ourguiba led Tunisia to independence in
1956 and has been the country's only president,
ruling in a highly personal style. The succession
question, as it becomes more urgent, conse-
quently is having a highly unsettling effect on
political life. Existing constitutional provisions
call for the prime minister to fill out any unex-
pired portion of a presidential term, but various
plans to modify this system have been discussed
from time to time. Nouira has a number of rivals
for the succession, and the matter could come to
a head at the party congress scheduled for next
fall. Bourguiba some time ago announced his in-
tention to run again in the December 1974 presi-
dential election's
turns her immediate attention to food deficits,
serious petroleum and fertilizer shortages, and the Bourguiba's latest hospitalization came amid
selection of a new president of India in August. the furor touched off by his signature on January
She does not have to face elections until5la 12, while Nouira was away, of an agreement with
TUNISIA: PROPPING UP BO~URGUIBA
25X1 '~ Prime Minister Nouira and other key advisers
of ailing President Bourguiba are apparently at-
tempting to relegate him to figurehead status
Libyan President Qadhafi to merge the two coun-
tries. Nouira and others quickly succeeded in
backing the Tunisian Government away from the
proposed union and also in bringing about the
ouster of a leading rival for the succession who, as
foreign minister, had helped arrange the merger.
There are a significant number of Tunisians, par-
ticularly among the intellectuals, who still believe
that Tunisia would benefit from joining with its
backward but richer neighborl
could change if Bourguiba's condition is adversely
affected by a strenuous schedule of public an-
The short-range prospect is for continued
behi d-the-scenes maneuvering by the presidential
aspirants under a relatively calm surface. This
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VLVI lL A
11,7 The pace has quickened at the Conference
on Security and Cooperation in Europe, with
most delegates hoping they can have a "skeleton"
of the final documents ready before the Easter
recess.
x`18 There has been no evidence of substantial
moviment toward agreement on the major issues
facing the conference. The Western and Eastern
delegations still disagree on such significant issues
as the possibility of future peaceful change of
Europe's. postwar frontiers, freer movement of
persons and information between states, and
constraints on military activity to strengthen
security
{, i; Some optimism may have been generated by
app ent progress in the sub-group studying de-
velopment of conference follow-up measures, a
goal sought by the East. Widespread support has
now been expressed in the sub-group for im-
plementilig some kind of undefined follow-up
procedures to the conference, despite the argu-
ment that any Western concessions on this ques-
tion should be held in reserve. The Danes broke
ranks with their EC colleagues to support pro-
posals for follow-up measures even though the
Nine had agreed earlier to remain silent for the
present on such proposals. The Danes were
careful, however, not to support specific
procedures]
.; (Agreement on an over-all skeleton draft is
possible by Easter, but most major substantive
statements are likely to be bracketed to indicate
disagreement. Resolution of these differences will
remain a difficult process. If a final draft agree-
ment is to be reached by Moscow's self-imposed
deadline of mid-summer, it would have to be a
very general document, designed to allow the
signatories to interpret its major provisions to suit
EC: ATTITUDE ON ENERGY COORDIN, TION
-16 -7f)
J
f fie preparAi_ ns for e cheduled
medting of the 12-nation Energy Coordinating
Group in Brussels on March 13-14 are clouded by
concern over US criticism of the recently an-
nounced EC plan to explore wide-ranging coop-
erative projects with the Arab states. The Eur25X1
peans in general are likely to view with cautik,.
their role in the US-sponsored Coordinating
Group if this participation seems likely to become
politicized and is presented as an alternative to
European moves for EC-Arab cooperation.
The Europeans have some reservations about
the scope of the energy discussions and the
proper forum for taking up particular issues.
Nevertheless, there has been little to indicate that
the Europeans regard the EC Nine's plan to sound
out the Arab states on economic and cultural
cooperation as a substitute for the broader US-
initiated proposals for cooperation among the
oil-consuming nations. The London Financial
Times pointed out in an editorial on March 5 that
the community's endorsement of the French
desire for a special EC relationship with the Arab
world has not infringed on the energy problems
being tackled in the wider forum. The community
recognizes that it cannot, by itself, hope to deal
effectively with the world-wide problems of
energy.
Although the French decided some time ago
not to take part in the deliberations of the Coord-
inating Group, the other Europeans have been
hoping Paris might be brought along eventually.
The French have said publicly, however, that they
would participate in energy discussions if they are
open to all the 24 industrialized countries that are
members of the Organization of Economic Coop-
eration and Development. They do not want
discussions restricted to the five larger EC
members, Canada, Norway, Japan, and the US, as
suggested for some topics in the terms of ref-
erence for the Coordinating Group. Out of self-
interest, the smaller EC members also favor en-
largement of these discussion arouns_F
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'_fhe Norwegians will soon become the only
net oil exporters in Western Europe. Eventually,
Norway might be able to supply nearly all the
petroleum needs of the Scandinavian nations, if
current production estimates are valid. Although
Oslo has offered to share its abundance with its
neighbors, it is taking steps to ensure Norwegian
control of its off-shore petroleum and natural gas
resources.i
Norway began developing its portion of the
#Jort Sea fields in the late 1960s. It recovered
some 300,000 tons of oil in 1971, and nearly six
times that amount in 1972. The Norwegians
expect to produce five million tons in 1974, and
to level off annual North Sea production at 50
million tons of oil and 45 billion cubic meters of
qas in 1980. By holding to a production limit,
Oslo hopes to avoid the undesirable economic and
ecological consequences of hasty or uncontrolled
exploitation of energy resources.(
f.r In line with Norway's policy of maintaining
maximum control over exploitation of its re-
sources, the Norwegian Government recently
proposed that parliament adopt stringent meas-
ures for the North Sea development area and the
region along the northern continental shelf. The
proposals, which would strengthen government
control and restrict private domestic and foreign
investment, are certain to generate considerable
domestic controversy. Private oil companies are
bitter over the small role assigned to them, and
the Conservative Party has called the move a
challenge to the non-Socialist majority./
-,I Norway's ultimate recoverable North Sea
reserives are estimated at between one and two
billion tons of oil and between one and two
trillion cubic meters of natural gas. Norway's oil
consumption is currently running about nine mil-
lion tons annually. It does not use natural gas.
Petroleum consumption in the five Nordic states
totaled 73.6 million tons in 1972. If consumption
remains relatively stable, Norway's estimated
North Sea production, coupled with additional
planned exploitation of the Norwegian con-
tinental shelf north of 62 degrees, might satisfy
Scandinavian demands. Furthermore, at the
planned production levels, the Norwegian fields
might continue to yield well into the next
century.]
Norway initially welcomed foreign invest-
ment, and numerous foreign companies are now
involved in oil exploitation. Most of these com-
panies have offices in Stavanger, on Norway's
southwest coast, which now has a sizable colony
of English-speaking oil company employees and
their families. I
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The government also proposes to ban the
gran ing of additional concessions to private com-
panies south of the 62nd parallel. Instead, the
Norwegian State Oil Company would become the
instrument for implementing the country's oil
policy. The continental shelf north of 62 degrees
would be opened to exploration, presumably
under stringent Norwegian regulations, but not
until certain international questions are resolved.
The demarcation line between the Soviet and
(Norwegian portions of the shelf in the far north-
near the USSR's large naval base at Murmansk-
currently is being negotiated. In addition, the
Law of the Sea Conference may establish distance
and depth regulations for shelf exploitation.?
The continental shelf may extend several
~hunIred miles out to sea along the northern por-
tion of Norway's coast. The Svalbard Archipelago
is on the northern edge of the European undersea
massif. It is not clear whether this area can be
claimed by Norway, along with the closer and
shallower areas of the shelf. Norway has sover-
eignty over the archipelago, however, by virtue of
the Svalbard treat of 1920 The USSR and the
NORDIC PETROLEUM STATISTICS
(in millions of tons for 1972)
country
production
consumption
refining
capacity
Denmark
0.2
18.9
11.0
Finland
----
13.0
9.3
Iceland
Sweden
Norway
1.7
9.2
8.6
Total Area
1.9
73.6
41.0
oil crisis, Norway offered to mediate, believing
that its unique position as both a consumer and
producer provided special leverag2l
y
US are two of the more than 40 signatories, but '15` Oslo recently offered to permit other Scan-
only Norway and the USSR have maintained per- dinavian countries to share in the benefits of its
manent settlements and installations on Svalbard oil development. At a Nordic Council meeting in
Stockholm last month, Prime Minister Bratteli
[Norway has constructed an all-weather air- suggested that Sweden exchange its industrial
field near Longyearbyen, the archipelago's main know-how for Norwegian oil. Oslo hopes that the
settlement, and the Norwegians have agreed to Swedes will help expand Norway's steel industry
allow the Soviets to station five or six permanent1(- as well as its refining capacity. If North Sea oil
aircraft maintenance personnel at the facility. eventually is brought ashore in Norway, Oslo also
Perhaps to prevent further exploitation in certain will want to develop a petro-chemical industry,
areas, Oslo recently set aside portions of the arch- probably with the help of its Scandinavian
ipelago as wildlife sanctuaries and national parks. neighbors}
The undersea area around Svalbard may have oil-
bearing potential and the islands could provide 1rThe oil-hungry Swedes have responded
the most convenient staging area
operations. 1
for off-shore eagerly to the Norwegian offer, but at the present
~In addition to its recommendations govern-
ing oil exploitation, the government also suggests
that Norway play an expanded role in interna-
tional energy policy. Norway may eventually seek
affiliation with oil-producing countries, pre-
sumably through OPEC. In the early stages of the
rate of development it seems unlikely any Nor-
wegian oil will reach Sweden before 1980. The
Norwegian offer is also good news for Finland
and Iceland; both import the bulk of their oil
from the Soviet Union. Despite Denmark's grow-
ing off-shore oil exploration and development in
the North Sea, the Danes must import vast quan-
ta re.
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USSR-FRANCE: PATCHING THINGS UP
President Pompido. will meet with General
Secrhtary Brezhnev at a Black Sea resort next
week. The two leaders apparently intended to
meet earlier, but Middle East developments and
strains in Soviet-French relations led to postpone-
ments. It was only during Foreign Minister Gro-
rnyko's visit to France late last month that final
arrangements for the trip were made.
Brezhnev and Pompidou will have a variety
of problems to discuss, but their main purpose
will be to revive the once-vaunted "special rela-
tionship" which has become somewhat frayed
over the last few months. Whatever private differ-
ences emerge, the two leaders will try to present a
public image of harmony.
The French believe the USSR failed to con-
sult adequately during the Middle East war, while
the Soviets have serious reservations about French
statements last year expressing interest in West
European defense cooperation. The Soviets have
also been disturbed by France's unwillingness to
participate in MBFR, and may feel that this atti-
tude is spreading to other West European
countries.
French view that the Western allies should re-
strain future initiatives by Bonn in West Berlin.
European security issues have generated an-
other set of irritants to bilateral relations. The
French are unenthusiastic about Moscow's pri-
mary goal of obtaining an unambiguous declara-
tion on the inviolability of frontiers, and are
disturbed by the Soviet drive to cripple the "freer
movement" concept by appending restrictive
clauses. Paris also has been unresponsive to Mos-
cow's overtures on a summit-level finale for
CSCE. Pompidou, in particular, is reluctant to
attend an international gathering that he fears
would be dominated by the superpowers.
On the positive side, Moscow has applauded
France's stand at the Washington energy confer-
ence. The ill-will and distance between the French
and their European allies that emerged during the
conference must have given Moscow some addi-
tional reassurance that a French-promoted Euro-
pean defense arrangement is not going to reach a
serious stage in the near future.
On the Middle East, the Soviets may attempt
to dissuade Pompidou from using arms sales as a FRENCH CABINET STREAMLINED
lever for French influence in the area. This is a
touchy subject, however, and is an area where the ) -f \President Pompidou reshuffled his cabinet
Soviets are not likely to have much impact. It last week in an effort to form a more cohesive
seems likely, therefore, that whatever representa- government capable of dealing with the myriad
tions they make will be low key. In his prelimi-,? '-problems facing France and to reassert his own
nary talks in Paris, Gromyko seems to have
steered clear of any specifics, although his defense
of US policy in the Middle East might have been
meant as a way of indicating that French involve-
ment in the area would not be helpful.
The Soviets will try to get the French to
urge West Germany to refrain from establishing a
federal environmental office in West Berlin. This
is not likely to work because Paris' position is
that Bonn cannot back down now that the office
has become an issue with the Soviets. By pressing
the matter, however, Moscow may strengthen the
authority in an atmosphere of continuing uncer-
tainty over his health. There are no new faces in
the cabinet, but the manner in which Pompidou
handled the deliberations leading to the reshuffle
suggests that he used the occasion to patch up his
differences with the orthodox Gaullistsl
IThe new cabinet, smaller by one third than
its predecessor, combines several technical func-
tions and eliminates other less important ones.
The major portfolios did not change, and Justice
Minister Taittinger, Finance Minister Giscard, and
Housing Minister Guichard were accorded the
additional prestige title of minister of state:-)
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Y 0 Both Jean Royer and Jacques Chirac, who
have been accused of exploiting their positions as
commerce and agricultural ministers to gain popu-
x' larity with the workers and farmers, have, been
shifted to other posts. Former interior minister
Marcellin, who was tarred by the Le Canard bug-
ging scandal, was shifted to another ministry, and
former industry minister Charbonnel, who openly
clashed with Prime Minister Messmer, was
dropped.
(c ( By reappointing Messmer as Prime Minister,
Pompidou has probably muted, at least tem-
porarily, the speculation over his successor. The
colorless Messmer is not considered to be a seri-
ous presidential contender. Had any of the major
presidential hopefuls been appointed, it would
have been immediately construed as the nomina-
tion of the ailing Pompidou's successor, and Pom-
pidou would have assumed a lame-duck status"
Instead, Pompidou has kept all his options
open and has recaptured control over the timing
of events in French political life. Pompidou has,
in effect, reminded French politicians of the
supremacy of the presidency in the Fifth Re-
publi4
ITALY: PUTTING IT BACK TOGETHER
Mariano Rumor's eight-nRbt}; d govern-
ment collapsed last week after the small but influ-
ential Republican Party withdrew over an eco-
nomic policy dispute with the Socialists. Rumor
was asked almost immediately by President Leone
to make the first try at putting together the
country's 36th postwar government, but any gov-
ernment formed now is likely to be an expedient,
contrived to get the country through its conten-
tious referendum on divorce, now scheduled for
May 12.
Early indications are that Rumor will aim
for another center-left grouping among the same
parties-Christian Democrats, Socialists, Social
Democrats, and Republicans. Rumor will face the
nettlesome task of reconciling the opposing views
of the Socialists and Republicans over economic
priorities. Successive governments have been im-
mobilized by disagreement between the Socialists,
who have demanded immediate action on costly
social and economic programs, and the Republi-
cans, who have insisted on budgetary austerity.
The issue came to a head last week when Socialist
Budget Minister Giolitti accused Republican
Treasury Minister La Malfa of trying to force his
policies on the country indirectly through the
terms of a loan he had negotiated with the IMF.
If the Republicans cannot be persuaded to
rejoin the coalition, Rumor or some other pre-
mier-designate may ask them to support in parlia-
ment a government composed of the remaining
three parties. The three parties have enough votes
in parliament to go on without the Republicans.
The Republican Party, however, enjoys influence
out of proportion to its size-it is the smallest
coalition member-because of its internal unity and
La Malfa's prestige as an economist.
The Christian Democrats may have to set up
a temporary one-party caretaker government if
these alternatives fail. This is an established way
of letting the dust settle, but there is not much
enthusiasm for the idea now. The other coalition
parties all favor the existing divorce law, and they
do not want the Christian Democrats, who
oppose divorce, in the driver's seat during the
referendum campaign.
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The Communist Party was caught off-guard
by the government's collapse. While Rumor was
in office, the party supported his efforts to deal
with economic problems and adopted a construc-
tive stance in parliament. At the same time, the
communists accelerated their campaign for an
open role in the government by pointing out that
the ruling parties were already accepting indirect
communist support.
Although the communists are making a rit-
ual bid for inclusion in the next government, they
know that they cannot make a good case with the
divorce referendum pending. The communists are
at odds with the dominant Christian Democrats
on the divorce issue and would have preferred to
avoid a government crisis until at least after the
referendum.
The dissolution of parliament followed by
new elections is still considered a last resort, even
though it would automatically postpone the
troublesome divorce referendum. The center-left
parties probably will resist this temptation, be-
cause they fear that the communists and neo-
fascists might benefit from voter resentment over
inflation, energy-related austerity measures, and
25X1 the recent oil payoff scandal.
The government's recent efforts to explore
the possibility of loosening Portugal's tight grip
on its African territories has led to a confronta-
tion between rightist stand-patters and those who
believe changes are necessary. As a result of bitter
opposition from the right, Prime Minister Caetano
appears to have backed off from any change at
the present time.f
he publication of Spinola's book has led to
considerable political infighting over demands
from the right, led by President Thomaz, for
Spinola's dismissal, and Caetano himself is also
under attack for allowing the book to be pub-
lished. Spinola will be difficult to oust. He has
wide support in the armed forces, includin the
backing of his boss, General Costa Gomes.
13 ' There are other signs that the government
was )considering softening its policy toward its
overseas territories. During a recent visit to Mo-
zambique, the overseas minister mentioned the
possibility of granting increased autonomy to the
African territories. Lisbon also permitted the for-
mation of a multi-racial organization in Mozam-
bique led by a former insurgent. Although the
new group has been described in the foreign press
as a "third force" that could provide an "African
solution" to Portugal's colonial roblems, Lisbon
has been careful to limit its scope
CPressure on Caetano against a policy change
was recently intensified following stepped-up in-
surgent activity in Mozambique. In an attempt to
placate white settlers who have protested alleged
lack of army protection there, the government
agreed to provide them with arms and a radio
network. Lisbon is concerned that they might
seek a "Rhodesian solution.' 'I
(\rhe conflicting pressures on Caetano were
evident in his speech last month at his party's
annual congress. He stressed that Portugal cannot
accept a policy that would mean abandonment of
the whites. At the same time, he referred to his
own past support for a federation or community
of Portuguese territories-'-T
Caetano has tried to appease both sides. He
r" f 1 Last month the government-presumably apparently has refused to fire Spinola, but in a
with Caetano's acquiescence-permitted the publi- speech this week to the National Assembly, the
cation of a book calling for self-determination for prime minister reaffirmed Portugal's determina-
the Portuguese African territories. The author, 41 tion to remain in Africa and to build a multi-
General Antonio de Spinola, is the former com- racial society there. He scorned any vote of self-
rnander in chief and governor of Portuguese
Guinea, and now vice chief of staff of the armed
forces. 1i
determination as "inappropriate for the African
mentality," thus repudiating one of Spinola's
principal points.
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`t! [The elections on March 10 will set the stage
fo the formation of Belgium's 22nd government
since World War II. The elections are not ex-
pected to lead to a settlement of Belgium's long-
standing problem-how to get the French-
speakers of Wallonia and the Flemish-speakers of
Flanders to live together. There are signs that the
election process will only divide the country
further into rival groups
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'( ) For the first time, the three traditional Social Christians who are expected to lose a few
parties-Socialist, Social Christian, and Liberal- seats. Any government formed as a result of such
that have governed Belgium in various groupings hard bargaining would be even weaker than the
for almost three decades have each posted two last on(4
lists of candidates in Brussels, a French-speaking
list and a Flemish-speaking list. In effect, the 7t1 rSome of the more doctrinaire Socialists have
traditional parties have split. The Socialists still gon so far as to say they intend to remain
maintain a semblance of party discipline, but the outside the government and to work for their
Social Christians and the Liberals, who have subq '- reforms in opposition. Socialist co-President An-
divided into a third group catering to the Brussels dre Cools, who is widely believed to have engi-
area alone, have been seriously weakened: _ neered the fall of the last government for political
'motives of his own, has invited liberal Social
These divisions will erode the power and Christians and Communists to join the Socialists
authority of the traditional parties, which have('., in a Progressive Front. Although such a grouping
already suffered by large-scale retirements oft', of political bedfellows at a national level is highly
prominent legislators since 1971. In general, their unlikely in the near future, the proposal lends
replacements have been more radical and doctri-(;f1 credibility to Socialist threats to work in opposi-
naire, making the formation of coalitions more '/ tion. In this case, the Social Christians perforce
difficult than ever would have to turn to the linguistic parties in
order to achieve the necessary parliamentary ma-
The decline of the traditional parties has,n jorities. Considering their conflicting views on sev-
beerS accompanied by an increase in strength of ICeeral key issues, such a coalition would be highly
ethnic minority parties. The Volksunie in Flan-( .unstable-even by Belgian standards.
ders, the Wallonian Rally, and the Democratic
Front of Francophones have increased their share
of the votes in recent national elections from
insignificant percentages in 1968 to a healthy
10-25% in 1971. The trend is expected to con-
Belgian National Elections
1965-1971
tinue in this election and will probably add to the 50 Percent of total vote
instability of the central government.)
L If the two major parties, the Social Chris- 40
tians and the Socialists, retain enough seats to
ensure implementation of the comparatively mod-
erate plans for federalism now planned, they will
probably forge another coalition. The Socialists, 30
however, are increasingly dominated by their left
wing which is attempting to exploit the energy
crisis and the current public distrust of the large
oil companies in order to radicalize the 20
party platform without losing votes. One of the
Socialist planks demands government participa-
tion in the energy sector of the economy, and
other planks concern education, abortion, and 10
government participation in the private sector.
The outgoing government had reached an impasse
on these issues, which are anathema to the Social
Christians. Should the Socialists increase their
parliamentary strength, they will drive a very hard
bargain before entering into a coalition with the 55536 3-74
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1968
1971
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Argentina:
CORDOBA SITUATION REMAINS CLOUDED
) t-V he government's inept handling of the
p lic rebellion against the left-wing provincial
government in Cordoba has dimmed the prospects
0 cr early or peaceful resolution of the conflict. If
Peron obtains congressional approval for plans to
invoke federal intervention of the province, re-
newed and bloody clashes can be expected be-
tween opposing left and right-wing forces in
Cordoba-and possibly in other cities.?
D 0 Following an acrimonious debate, the Senate
app oved Peron's request for authority to re-
organize the executive branch of the Cordoba
government, but opposition members of the
1..- Chamber of Deputies have already raised a howl
approval by that body? / ( few slate of labor leaders adds weight to the
argument of those who claim Peron conspired to
25X1
25X1
In addition to widening
the breach among rank-and-file Peronists, the
Cordoba debacle appears to be creating some dis-
sension within top levels of the Peron govern-
ment. Secretary General of the Presidency Solano
Lima is said to be angry over Peron's decision on
intervention after being assured by Peron recently
that this was not in the cards. Solano Lima has
been reported in recent weeks to be on his way
out and this final "humiliation" may prompt his
resignation. Solano Lima has been Peron's inter-
mediary with leading politicians and has also been
the anchor man in attempting to iron out disputes
between federal and provincial authorities-many
of them the outgrowth of Peron's purge of
Marxists.
fhe volatile situation in Cordoba is further
'
complicated by the maneuvering of Peron
s ortho-
dox labor supporters to oust leftists from control
of Cordoba's powerful trade union confederation.
Coinciding with the outbreak of the police revolt,
is enacted by Congress, but subject to eventual he convocation of a "rump" congress to elect a
of protest over what they regard as the govern-
ment's heavy-handed and illegal action in per-
mitting the removal of a democratically elected
administration. The US Embassy reports that the
bill may face a protracted delay in the legisla-
ture-a situation that would leave the Cordoba
problem dangling in limbo. This hiatus, in turn,
would substantially increase the chances for fur-
ther conflict in the perennially troubled industrial
city. There is a possibility, however, that a federal
administrator might be appointed before the bill
bring about the course of developments in Cor-
ffhe atmosphere in Cordoba, meanwhile, re- -1-ba. While achieving their objectives, the con-
mains tense following a week of strikes, ex- ',oluted tactics of Peronist labor leaders in sup-
plosions, and street fighting that has left an unde-
termined number of dead and wounded. The
ousted governor and his aides reportedly have set
up a rival government in the nearby hills with the
support of Peronist guerrilla leaders and some
planting the leftists could cause further problems
in the city. Leftist refusal to acknowledge the
validity of the union elections is likely to increase
the level of protest-and probably violence-be-
tween rival unionists. The reopening of the uni-
versity-a hotbed of leftist activity-will also in-
crease the chances that students will join the fray
should armed leftist labor groups decide to pro-
mote disorder in the province. If civil strife be-
comes widespread, it would sorely test Peron's
ability to keep his fragile movement intact and
bring some semblance of order to thi- - -
ing Argentine community.
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I I
4- The Arana government has named the ad-
mini~tration-backed presidential candidate, Gen-
eral Kjell Laugerud, the winner of last Sunday's
election despite the fact that the moderately left-
ist oppositi n candidate, General Efrain Rios,
actually won
- !The government delayed until March 6 be-
fore 'announcing officially that Laugerud had
won. It needed the extra time to engineer a mas-
sive fraud to give Laugerud a plurality in the
three-man race. The final count issued by the
government gave Laugerud about 40 percent of
the vote. Rios was given 36 percent, and 24
percent was won, apparently legitimately, by
Colonel Paiz, the third candidate. As none of the
three received a majority, the government-
controlled Congress must decide. In the next two
weeks, it will make its choice-and that choice
will almost certainly be Laugerud.?
!The government's belated announcement
came a few hours after police used force and tear
gas against supporters of Rios who were demon-
strating in the capital. Earlier, Rios had accused
the government of gross fraud and claimed he had
won a majority of 130,000 votes. He declared
that "historical responsibility and military honor"
required him to reject the government's stolen
election. He threatened to "paralyze the country"
General Kjell Laugerud
to do nothing to upset the government's plan. In
any case, the leading generals are believed to favor
Laugerud, ,and any action on their part is likely to
benefit him
25X1
25X1
Whether the government will be able to
makb the Laugerud "victory" stick will depend
heavily on the attitude of the army, which in turn
will be influenced by the degree of popular dis-
content created by the government's transparent
fraudulence. Thus far, the army has remained on
Although it would
prefer to avoid becoming involved in a major
conflict between pro- and anti-government ele-
ments, the army may be forced to act if violence
breaks out. In the absence of violence, it is likely
somle degree of instability, with each side airing
charges and countercharges. Outbreaks of serious
violence are possible. In the longer run, the elec-
tion results could mean a resurgence of large-scale
violence that generally has been absent during the
last part of President Arana's term. The outlawed
Communist Party and the Cuban-oriented Rebel
Armed Forces will view the outcome as proof
that working within the system is impossible.
They may find new support for extreme measures
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