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April 5, 1974
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Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Weekly Summary State Dept. review completed S Secret Secret 5 April 1974 No. 0014/74 RD PLEASE RETURN TO Copy AGENCY ARrunVEE N2 ARCHIVAL, RECO 25X1 58 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 CONTENTS (April S, 1974) eiiiger?ce, reports and analyzes sgni+- s of the week through noon on i hursday. i L c , ?orn c re.esearch, the Office 01 Strategic: tt i ..ire.t_oiate of Science and Technology EAST ASIA ceher?sive treatment and therefore PACIFIC ?iv as --ruecial Reports are listed in the 1 The USSR: Media Look at the US 3 Egypt: Countering the Critics 4 Israel-Syria: The Golan Front 6 France: Vying To Succeed Pompidou 12 Japan: 11 Thailand: Military Rumblings 8 China: Hard Line Expected at UN 9 Laos: A Coalition at Last 10 Cambodia: Out of the Shadows 16 Western Europe: Aircraft rou e 17 Communists Seeking Oil for Aid 17 Yugoslavia: Restraining the Conservatives 18 Portugal: Overseas Policy Divisive 19 Romania: Ceausescu's Coronation MIDDLE EAST AFRICA 20 Israel: On the Home Front 21 Turkey: The Military Watchdog 22 Ethiopia: Still Unsettled 23 Soviet Arms to East Africa WESTERN HEMISPHERE 24 Peru-Chile: A Volatile Border 26 Venezuela: New Directions 27 Brazil: Liberalization in Doubt 27 Argentina: Peron Switches Tactics Comments and queries on the contents of this publication are welcome. They may be directed to the editor of the Weekly Summary Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 the USSR: [Soviet media have begun to send out mixed signals on the outlook for Soviet-US relations. The evidence is tentative, but there are signs that Moscow has some qualms about continuing to accord detente with Washington the degree of prominence that has become commonplace over the past two years or soo / fA major article in Pravda on March 30, marking the third anniversary of the 24th party congress at which Brezhnev launched his "peace offensive," gave scant attention to US-Soviet ties. By contrast, last year's anniversary article placed considerable stress on the gains achieved in bila- teral relations.) I IThe recent article did take brief note of the "extremely important effect" improved US- Soviet relations have had on international affairs. The usual references, however, to meetings at the summit, SALT, and recent progress in bilateral ties were missing.7 I Fin addition, the allusion to the US was fol- lowed by a reference to the "great complexity" of the current international situation. This situa- tion, said Pravda, is marked by the continuing military preparations of various capitalist coun- tries and by their counterattacks against Mos- cow's efforts toward detente) I ILast year's Pravda article hailed the "para- mount international significance" of US-Soviet relations and praised the results of the May 1972 summit. It listed the major agreements concluded between General Secretary Brezhnev and Presi- dent Nixon, and it expressed optimism over prospects for SALT. Last week's Pravda article is not the only straw in the wind. Earlier this year, the Soviet Communist Party's theoretical journal Kom- munist gave a similarly perfunctory treatment to relations with Washington. Handling of this sensi- tive issue in the Soviet press suggests a more cautious attitude on Moscow's part, if not a slack- ening of enthusiasm on the part of some Soviet leaders IThe Soviets have already found ways to demonstrate their displeasure with Washington's expanded role in the Middle East, with the delay in granting the USSR most-favored-nation status in trade, and with US statements on nuclear tar- geting. These concerns, together with uncertainty over the political situation in the US, may have led the Soviets to pause and take stock of their own expectations with regard to detente:? 1 This has not prevented Moscow, however, from trying to counter what Soviet commentators have called "pessimistic" press accounts of the outcome of Secretary Kissinger's recent visit to Moscow.( One commentator said that the Secretary's visit was a "new contribution" to relations and an "important step" toward guaranteeing the success of President Nixon's planned visit to the USSR. Taking issue with negative Western press assess- ments of the progress made on SALT during the recent Moscow talks, the commentator contended that mutually acceptable solutions are possible despite the complicated nature of the problem. The Soviet international affairs weekly, Life Abroad, went even further, asserting that "an agreement could be worked out in time for the planned summit meeting."] fA similarly positive portrayal of the Sec- retary's visit was carried by Tass, which noted SECRET Page 1 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET that improvement in US-Soviet ties has allowed tangible results in several major areas, including arms control. Refuting allegations about the "tough" position Moscow adopted on SALT dur- ing the Secretary's visit, Tass branded these idle speculation. )An article in Izvestia took much the same line. It presented a more sober appraisal of the prospect for progress at SALT, however, pointing to the complicated nature of the problem and the alleged opposition of the Pentagon. There is increasing evidence that the Soviets have decided to cut back significantly on the number of Jews allowed to emigrate to Israel. This decision is probably related to the poor prospects Moscow sees for gaining most-favored- nation treatment from the US. During the first three months of 1974, Soviet Jewish emigration to Israel was about 22 percent less than the same period last year] \The Soviets contend disingenuously that there are simply fewer Jews who now wish to leave the Soviet Union. According to a Moscow radio commentator, applications for emigration decreased sharply as a result of the October war in the Middle East, and in January of this year applications were less than half the number of January 1973. The commentator claimed that educated Soviet Jews do not want to give up the advantages of socialism and are skeptical about the kind of treatment they would receive in Israeli tt it is becoming clear, however, that the authorities have deliberately put new bureaucratic obstacles in the way of prospective emigrants. These procedures have included greater police scrutiny of the applicant, the need to submit character references that go back at least six months, qnd a requirement that application forms be typed.j I In practice, a would-be emigrant must now quit his job at least six months before applying for emigration, since upon applying he runs the risk of being fired and thus receiving a poor Awaiting Transportation character reference. The requirement that applica- tion forms be typed is a lesser obstacle, although it does mean that a prospective emigrant must secure a permit-required of all private citizens- to purchase a typewriter, or find some other method of having the application typed./ 4 ,Such harassment has doubtless discouraged a great number of potential applicants but probably is not the only factor contributing 'to the decline in emigration. Despite persistent Soviet prot- estations that "practically any" citizen may go to Israel, there have recently been signs that Soviet authorities are simply refusing exit permits to large numbers of Jews even after they have managed to satisfy the bureaucratic requirements. Moscow's tougher policy can probably be atri uted to the trouble the USSR is having in getting most-favored-nation treatment from the US. The message seems to be that if the US Congress is willing to turn down trade concessions to Moscow by linking the issue to Soviet emi- gration policy, the Kremlin is prepared to reverse this linkage and restrict emigration until most- favored-nation treatment is grainted. SECRET Page 2 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET Egypt: Countering The Critics f : President Sadat appears to be growing in- creasingly concerned that criticism of his foreign and domestic policies from the Soviets and Arab radicals will adversely affect the willingness of other Arab states to continue peace negotiations? He has begun counter-attacking and, in a major policy address on April 3, lashed out at the USSR for being not the protector of Arab interests it claims to be, but instead a hindrance to the Arab cause! SSadat recited a long history of unfulfilled Soviet promises of aid and charged that Moscow had obstructed his efforts over the years to initi- ate hostilities by consistently attempting to limit his focus to diplomatic rather than military action. At the same time, he implied, Soviet tactics virtually guaranteed that diplomatic action would be fruitless. Largely because Moscow sought to keep the Arabs militarily weak, the US gained the impression that the Arabs were ineffec- tive "dead bodies" too weak to bargain with or to deserve diplomatic intervention to break the Arab-Israeli impasse 0 f3y emphasizing that the Arabs would still be in this stagnant situation had he heeded Soviet opposition t:o war, Sadat was telling the other Arabs, particularly Syria, that Moscow is an un- reliable ally and that dependence on Soviet advice in the cyyrrent negotiations will also do the Arabs nogoodi jSadat has attempted in recent weeks to back rack from the blatant criticism of Nasir by noting that he shares responsibility for all of Nasir's policies and is attempting now not to "destroy Nasir's legacy" but to correct the "nega- tives" of his predecessor's regime. This oft-re- peated theme---emphasized again in his speech this week-reflects some misgivings that Soviet crit- icism on the issue might strike a responsive chord among Egyptians, as well as other Arabs (g Although Sadat seems to be somewhat defensive in countering Soviet propaganda on internal Egyptian affairs, his outspoken attack on Moscow's war and peace policy may herald harsher attacks in the future on Soviet interests in Egyptl\The speech was preceded by an AI-Ahram editorial questioning the continued value of the Soviet-Egyptian friendship treaty and, although Sadat himself did not mention the treaty, he laid (y the groundwork for a later call for its modifica- tion if the close relationship with Moscow that it symbolizes begins to rankle still more. Such a move would risk Egypt's major source of military aid, however, and Sadat will have to approach this issue cautiously] Soviets in treating domestic matters, although ,,in this case his approach was more in the nature of a defense of his own policies than a direct attack on the critics of those policieslVBoth the 7 Soviets and radical Arabs have weighed in strongly against the anti-Nasir propaganda cam- paign launched in Cairo newspapers two months ago by overzealous Sadat supporters. Moscow and the radical Arabs seized on the campaign as indicative of a general rightward drift in Egypt, and Sadat is concerned about the impact of their charges that he is selling out both Nasir's "revolu- tion" and general Arab interests for the sake of the US and of his own domestic power position./ `Moscow, which has not yet responded to Sadat's speech, announced on Wednesday that it is sending a new ambassador to Cairo-Vladimir Polyakov. Although he has less status than his predecessor, Polyakov is an expert in Middle East affairs and probably has the primary task of salvaging whatever is possible of the Soviet- Egyptian relationship (a SSince the October war, Moscow has made energetic efforts to consolidate its relations with other Arab states----mainly Syria and Iraq-as alternative areas of influence. The Soviets will most likely, however, attempt to maintain their military aid program in Egypt, where they undoubtedly want to protect their investment while waiting hopefully for the balance to again swing back in their favor. SECRET Page 3 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET 6 11srael's heightened concern was prompted by indications that the Syrians might !be preparing to renew major offensive action. the Syrians had shifted their forces 125X1 into a better position to launch an !,attach SECRET Israel-Syria: The Golan Front Military Tensions High growing sense of crisis developed on the Golan front this week as shelling between Israeli and Syrian forces entered its fourth weekTel Aviv demonstrated its concern by giving wide publicity to its reinforcement of the front in a move apparently designed both to warn Damascus against any renewal of offensive action and to reassure the home front of Israel's military preparedness. Late in the week, however, Israel reduced its level of military action, possibly to give the situation time to cool down, as well as to assess the effect of its recent measures on Damascus., Page 4 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET I ~-r [Damascus apparently believes it must main- tain military pressure on the Golan front to sup- port its negotiating aims. It may also consider that an aggressive posture now will blunt criticism of any future concessions. Israel views this as a military threat, however 1, One result of the prolonged period of grb Wing tension has been to increase the chances of miscalculation by both sides, raising the possibility that a minor incident could lead to a major outbreak of fighting. Both Syrian and Israeli forces are in positions from which they could attack with little or no warning, and either side might launch a pre-emptive attack if it believed the other were about to strike Negotiations Begin J On the political side, the Syrian delegate to the Washington disengagement talks, Brigadier Hikmat Shihabi, is scheduled to arrive next week.! 1 During his visit to Washington last week, srae i Defense Minister Dayan submitted a disen- gagement proposal which, according to the Israeli press, would leave the Israelis still in control of a part of the salient captured in the October war. This proposal, which probably represents only Israel's initial bargaining position, would clearly be unsatisfactory to the Syrians, who reportedly will insist that the Israelis withdraw completely from the salient as well as from the town of al-Qunaytirah, which was captured in the 1967 war. The Syrians also want a linkage between an Israeli commitment to withdraw from all the oc- cupied territories and any immediate disengage- ment accord. For their part, the Israelis are in- sisting on the exchange of POWs prior to any withdrawal.] I (o [The Israelis are aware that their proposal is unacceptable to the Syrians, but they would apparently prefer to see the negotiations drag out for some months in the hope that the Syrians will modify their position. It is clear that for any disengagement to occur, both sides will have to modify their present positions 5ignificantly.~__ SECRET Page 5 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET France: Vying to Succeed Pompidou The first round of elections to selec uc- cesso to President Pompidou will be held on April 28 or May 5-earlier than either the Gaull- ists or their leftist rivals would have preferred. Gaullist Jacques Chaban-Delmas and Socialist Francois Mitterrand are the main contenders, but there will be several other candidates; most will declare within a week. The Communists, Socialists, and left Radi- cals had hoped an election would not occur until at least next year. They wanted more time to develop an image of international statesman for their leader, Socialist Francois Mitterrand, 57. The leftist alliance also hoped for time to exploit popular dissatisfaction with the government's fail- ure to resolve the country's economic problems. One Socialist leader recently said, "If we believed in God, we would be in church lighting candles for Pompidou's health." The leaders of the leftist alliance are still not agreed on how to present their candidates. The Communists want Mitterrand to run as the sole leftist candidate fearing that one of their own would do poorly and expose the party's weak position. Mitterrand, however, wants his allies to Francois Mitterrand field candidates so he can run on a moderate platform, rather than be associated with the more extreme portions of the alliance program. He is gambling that he will win enough' votes on the first round to make it into the second, where he hopes to prevail with the additional support of Communist voters. The other main candidate, Jacques Chaban- Delmas, 58, is a liberal Gaullist and a former prime minister. At a party congres's last Novem- ber, his Gaullist colleagues indicated that they would support him as a successor to Pompidou. The governing coalition-Gaul lists, Independent Republicans, and a small centrist! group-is in some disarray however. One of their major prob- lems is that Giscard d'Estaing, the leader of the Independent Republicans, may chgose to break coalition unity and run in the 1 first round. Giscard, 47, was thought to be Pompidou's favor- ite, but he faces serious opposition, from ortho- dox Gaullists. Giscard is also hampered by his patrician image and his association with France's economic woes as Pompidou's economics and finance minister. First-round challenges would', also come from: SECRET Page 6 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET Behind Pompidou; Messmer, Faure, Giscard d'Estaing, ? Pierre Messmer, 58, the lackluster, or- thodox Gaullist prime minister. ? Jean Lecanuet, 53, leader of one of the two center union factions. He won 16 percent of the first ballot in 1965 against De Gaulle. He may run to avoid having to associate him- self prematurely with one of the front run- ners; ? Edgar Faure, 65, the leader of the left- wing Gaullists and president of the National Assembly. He sees himself as a compromise candidate; ? Alain Poher, 64, the centrist who will act as interim president. In 1969, when he served in that capacity after De Gaulle's resig- nation, Poher won 42 percent of the second- round vote against Pompidou. Foreign Minister Michel Jobert is now re- ceiving considerable publicity for his aggressive foreign policy tactics, but he lacks a political base-he is not even a member of any party- which makes him an unlikely candidate. No president has been elected in the first round under the present system. In view of the many likely candidates, this election probably will be no exception. Uncommitted voters make up some 30 percent of the French electorate and usually determine the outcome. The French con- stitution provides that the Constitutional Council must set an election date within 20 to 35 days of the death of a president. Candidates must file by April 9 or 16. If no candidate receives an absolute majority on the first ballot, a second must take place two weeks later, with the two candidates who receive the most votes on the first ballot participating in the run-off. The law also allows the top candidates to withdraw in favor of one of the first-ballot losers. This can happen when a candidate is thought more likely to draw wide second-ballot support. On the second ballot, a simple majority elects. SECRET Page 7 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET CHINA: HARD LINE EXPECTED AT UN I Peking is demonstrating the importance it attaches to the special session of the UN General Assembly next week by sending the highest rank- t jng Chinese delegation ever to the UN)IVice Premier Teng Hsiao-ping, a member of the UN)[ Vice will lead the delegation, with Vice Foreign Minister Chiao Kuan-hua, a veteran at UN meet- ings, as his deputy IThe special session, which will deal with raw materials and economic development, affords China the opportunity again to champion efforts, ` by the developing countries to control their own natural resources. The Chinese may also antic- ipate that they will have an opportunity to _dis- cuss Taiwan and other issues with US officials 14t the session itself, the Chinese almost certainly will criticize the US and USSR for `plundering the economic resources of the developing countries. The Chinese, for example, probably will defend the pricing policies of the oil producing states and seek to blame high oil rites on the "exploitative" nature of capitalism and on manipulations by the large oil companies. Because of leftist pressure built up during the current anti-Confucius, anti-Lin campaign in China, Teng and Chiao probably will be much more critical of the international activities of US orporations than they have been in the recent past) A Chou seems to be holding firm on other foreign policy issues bearing on relations with the West. Western businessmen have encountered few i delays in conducting business with the Chinese, and the volume of Chinese imports from the West continues high despite criticism in the Chinese media of "over-reliance" on such imports. Despite the fact that Chou is under pressulre-on Taiwan as well as other issues-there appears to be no alteration in the substance of Chinese forei n policy. \Increased criticism of US business would be in line with the more militant note Peking has been sounding on several foreign policy issues in recent weeks. Speeches by Premier Chou En-lai have included reminders that China, as a socialist country, would continue to support revolutionary causes, and Chou's speech at a banquet on April 1 for visiting Cambodian Communist leader Khieu Samphan was resolute in its reaffirmation of rev- olution in the abstract. Increasingly militant rhetoric on some international issues has been accompanied by a harder attitude toward Taiwan SECRET Page 8 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 LAOS: A COALITION AT LAST fter more than 13 months of hard bargain- ing, the two Lao sides are ready to form the nation's third coalition government in nearly 17 years. Prime Minister Souvanna Phouma and his half-brother, Lao Communist chairman Prince Souphanouvong, are now expected to present their new coalition cabinet and advisory politica council to -the King for royal investiture on April 5. he 'Final breakthrough in the protracted negoctiations resulted from private discussions between Souvanna and Souphanouvong's personal emissary, Phoumi Vongvichit, who recently returned to Vientiane. The success of this dia- logue paved the way for Souphanouvong's return to the Lao, capital after an absence of some 11 years. Following a brief stopover in Hanoi, the Lao Communist leader-accompanied by a small entourage of senior officials-arrived b Pathet Lao aircraft in Vientiane on April 3]A crowd 'estimated at several thousand, including many students, welcomed the Prince from Sam Neua lin a prepared statement, Souphanouvong struck` a positive note on the prospects for success of the new government, but he cautioned that on the basis of past experience-an obvious reference to the rapid collapse of coalition experiments in 1957 and 1962-obstacles may yet remain in the search for peace and national reconciliation JSouvanna and Souphanouvong proceeded to the royal capital of Luang Prabang in preparation for the investiture ceremonies. They are to be joined there by the entire membership of the coalition cabinet and advisory political council. I'"1 An official roster of the new coalition's membership has not yet been announced. It appears, however, that key individuals in Sou- vanna's present cabinet will continue to occupy important portfolios-including defense, interior and finance--in the coalition cabinet, and that, for both sides, the new government will be a reflection of the remarkable staying power of the Lao ruling elite over more than a decade. Souvanna Phouma The protocol to the February 1973 peace agree- ment weights the leadership of the joint council in favor of the Pathet Lao makes the council , a Policy-recommending body independent of and co-equal with the coalition cabinet and ive 't s the responsibilitY for or anizin g 9 g general elections SECRET Page 9 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET l? After a long period of obscurity, Khmer communist "defense minister" Khieu Samphan is having his day in the international limelight. When Samphan arrived in Hanoi on March 28, he received a warmer welcome than that accorded Sihanouk earlier on his way back to China from Laos. The Chinese staged another impressive reception when Samphan arrived in Peking on April 1. Samphan's next stop reportedly will be Pyongyang. [in his major speech in Hanoi, Samphan emphasized that the only solution in Cambodia was for the US to end its "aggression" and ter- minate all forms of support to the Lon Nol gov- ernment. Samphan asserted that Cambodians would then be able to settle their own affairs. He did not repeat Sihanouk's recent call for direct talks with Washington. North Vietnamese leaders publicly assured Samphan that Hanoi could be counted on to render full support to the Khmer Communists. They also indicated that they would resist any efforts to press the insurgents into negotiating addition, his trip to Peking has served to identify the Chinese more closely with the Khmer Com- munist leadership. The prominence accorded Samphan also raises questions concerning Siha- nouk's political future.,` On the Battlefront [Khmer Communist forces this week ap- peared intent on following up their recent victory at Oudong with another at Kampot. They kept up their pressure against the southwestern provincial capital, pushing government defenders back within a mile of the city at several points. Al- though Phnom Penh has sent moire reinforce- ments to Kampot, the situation there at mid-week continued to deteriorate.' .3 )-'"Closer to Phnom Penh, lead elements of the Cam odian Army units participating in the effort to retake Oudong were still stalled a mile short of the town.! A Change of Councils ,-q [On the political front, President Lon Nol has In Peking, Samphan stuck to his militant line and gain denounced the US and its "lackeys" for alleged espousal of "sham cease-fire, sham talks, and sham peace." Premier Chou En-lai's public remarks reflected the cautious tone that has char- acterized Peking's statements on Cambodia over the past year. Although Chou made no specific reference to peace proposals, he implied approval of a negotiated settlement in Cambodia by citing the Paris and Vientiane cease-fire agreements as "victories" in Indochina: scra pea the High Political Council. Ostensibly the country's ruling body, the; council had become increasingly ineffective cue largely to political frictions among its three members-Lon Nol, Republican Party head Sirik Matak, and former chief of state Cheng Heng. In recognition of the need to maintain some sort of high-level advisory body, however, Lon No) subsequently established an "executive councilL" Besides the President, the new council consists of Matak, Prime Minister Long Boret, and Ca bodian Army chief General Fernandez. The inclusion of the last two will allow the principal executors of gov- ernment policy t participate more effectively in From the Khmer Communist viewpoint,,z-fits formulation.jLAlthough Matak is likely to be Samphan's visits probably are intended to empha- ' pleased at the prospect of having more responsi- size that the Khmer Communists are an inde- bility, he is certain to remain sensitive to any pendent force that must be reckoned with politi- efforts by Lon Not to impose his will on the cally before the fighting in Cambodia can end. In council. SECRET Page 10 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET THAILAND: MILITARY RUMBLINGS j\fter nearly six months of mostly lackluster civilian rule in Bangkok, the first signs of restive- ness among the Thai military have begun to appear. Earlier attempts to develop a democratic system of government have almost invariably foundered for lack of strong leadership and have resulted in military coups. From the moment that Thanom Kiittikachorn's military regime collapsed last October and he was replaced by civilians, local observers have been speculating as to how long the military, in control for most of the past 40 years, would allow "democracy" to last this time.) Sanya Prime Minister Sanya issued -de - a statement ing that the government would resign or that the cabinet would be reshuffled. He announced, however, that he was bringing four senior statesmen into the government as advisers to the prime minister, including former foreign minister Thanat Khoman and economist Puai Ungphakon. Sanya may hope that bringing the outspoken Thanat and the capable Puai into the government will enhance its image, if not its per- form nce, until elections can be held later in the year/ SECRET Page 11 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET the increasingly generous terms of Japanese aid, (though the terms still are less liberal than those of most major Western donors. Tokyo, with few exceptions, will probably not allow its loans to be used to procure goods and services from other developed countries. Japanese businessmen and government officials generally want development project loans to be used to finance Japanese exports. In a few instances, Tokyo has allowed world-wide procurement, largely because of political or oil-supply considerations, and such exceptions probably will still be made when considered expedient. 46 Jlapan's dependence on imported oil and other commodities is bringing about a significant shift in the distribution of its aid. Assistance increasingly will flow to countries and regions producing needed minerals and agricultural commodities. A cabinet-level International Co- operation Agency, being formed to coordinate aid programs, is expected to promote aid to help secure supplies of key raw materials.' ~L Following the October war and the Arab oil-production cutbacks, Tokyo began promising substantial loans and technical aid to countries in the Middle East, both oil producers and non- ,e producers, to help ensure friendly ties with oil- Japan has pledged at rich states. Since November , okyo is increasing its economic aid toLfii least $720 million in loans to several countries, developing nations despite concern over its bal- -r including about $380 million to Egypt. This ance-of-payments position. Under the budget for upsurge in aid accounts for much of the over-all ?fiscal 1974, funds for grants show a more than rise in the Japanese aid budget for this fiscal year, 40-percent gain over last year, to about $500 -s Tokyo's aid to this area had been minimal) ,~ million. Slightly over half this amount is ear- markedfor contributions to multilateral organiza- tions, such as the International Development Association and the Asian Development Bank. Loan allocations are set at about $840 million, up 20 percent. Total aid outlays last year were about $1 billion, a 7_Q-percent jump over the level In addition to the large grant component, mosf loans carry concessionary terms, reflecting Despite the large amount of aid to the id le East, the major portion of Japan's bila- teral aid probably will continue to go to countries in South Asia and the Far East. Resource-rich Indonesia, for example, is slated to receive some $400 million in loans this year. Latin America and Africa will have the lowest priority for aid, but some mineral-rich countries-such as Peru, Bolivia, and Zaire-are likely future recipients. SECRET Page Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 OF% P"41 SECRET Poth British and French leaders played to opinion at home in their presentations at this week's EC Council meetings in Luxembourg. Paris -made a concession only on US trade demands. The stiff positions of the two may preclude prog- ress for some time on almost all issues under consideration by the Nine. Over the next month, in any case, the attention of all the EC members is likely to be focused on the French elections.] ment except for its references to improving rela- tions with the US, and the Germans called on the British to relegate national interests to the back- ground. 'The initial reactions to Britain's tough tone in demanding new terms of membership in the EC have been generally negative, the prevailing senti- ment being that the implied ultimatum-better terms or UK withdrawal from the community-is not conducive to smooth negotiations. Britain's partners are virtually united against changes in the basic EC treaties. Concern over a serious clash between London and its partners is leading some officials of the Nine, especially from the smaller countries, to urge moderation and a matter-of- fact approach to Britain's stand. These officials take some comfort from London's pledge to con- tinue participation in community business while renegotiations are under way. They also hope that Britain's specific requests, when made, will prove amenable to compromises within existing EC structures and policies. ?Foreign Minister Jobert noted pointedly, how ver, that applicant states had ample opportu- nity during the negotiations for membership to 'make their points of view known, and that it was necessary for the new members to adapt to com- munity procedures. Jobert characterized as generally unacceptable the British intention to continue to participate in community activities while reserving the right to refuse further steps toward integration that would prejudge the re- negotiation issues.1 Il talian Foreign Minister Moro disagreed entirely with Foreign Secretary Callaghan's state- SECRET Page 14 WEEKLY SUMMARY =o'" 4 3 he EC took positive action only in the field of trade negotiations with the US. The foreign ministers-including the French-agreed to improve the EC's offer of tariff reductions to compensate for the adverse effects on American exports of EC enlargement. Even the revised offer is still likely to fall short of Washington's de- mands, but it will probably meet the US deadline of May 1. Paris had insisted last November that the EC's offer on compensation at that time was "final," but apparently softened its position because of recent US warnings of retalia- Callaghan entering EG Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 25X6 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET (,pl The joint British, West German, and Italian project to develop a European Multirole Combat Aircraft (MRCA) continues to encounter delays, rising costs, and technological difficulties. The project is about six months behind schedule, and some of the more pessimistic European experts on the project speculate that the plane will never get beyond the prototype stage? Serious problems with the MRCA's engines have twice delayed plans for its first flight---now expected to take place in May or June. France in developing a new low-level, twin- engined Dassault fighter aircraft which is sched- uled to be operational around 1980'. This aircraft, like the MRCA, will have a multirole capability allowing it to carry out reconnaissance, strike, air superiority, and interceptor missions. The council of ministers of the seven-nation Western Euro- pean Union reportedly will discuss the French proposal at a future meeting. similar French proposal several years ago was urned down by the British-West German- Italian consortium, and it is likely that Paris' current initiative will be rejected as well. A more likely alternative is that the countries involved will purchase less-expensive aircraft tailored for specific missions; West Germany and Italy have already expressed interest in this approach. Such aircraft could include the US-built A-7 and F-4, as well as the Lockheed Lancer and the YF 16 and 17, lightweight fighters now under develop- 25X1 k" \The cost of the airplane already has far exceeded initial projections. The cost per aircraft was originally estimated at the equivalent of $2.5 million. I Ps a result, the West Germans and the Italians are seriously considering withdrawing from the project and have begun seeking aircraft elsewhere. The UK does not want to cancel the project, but budgetary constraints may force London to restrict its participation and reduce the number of planes it might purchase. The French suggested in March that the three participants scrap the project and join Artist's conception of MICA SECRET Page 16 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 5tuht I COMMUNISTS SEEKING OIL FOR AID P" (p3 -14) he USSR and Eastern Europe are seeking more oil from the Middle East as well as increased cooperation with the national oil companies in producing countries. Eastern Europe is increasing its reliance on Middle Eastern oil-about one fourth of their imports is scheduled to come from Iran and the Arab producers this year. The USSR and Eastern Europe have pro- vided more than $1.4 billion of aid for the devel- opment of national oil industries in the less-devel- oped countries-almost half of which went to India and Iraq. Since 1969, the agreements in- creasingly stipulate repayment in oil. In February, Moscow was negotiating a contract with Iraq to accelerate development of the third and final stage of the North Rumaila oil field. This year, Romania extended the only new Communist aid for oil development-a $37 million credit for machinery and equipment to Argentina. More- over, Bucharest and Ecuador jointly announced plans for Romania to provide, probably on a commercial basis, technical services to Ecuador's petroleum sector. Although still less than 10 percent of total Soviet - East European aid undertakings in the Third World, oil development assistance in some countries has been a critical factor in establishing national oil industries. This was particularly true in India, where Communist assistance made pos- sible 50 percent of New Delhi's crude oil produc- tion and 60 percent of its refinery capacity. Iran's natural gas industry was encouraged by Soviet willingness to take gas, which had been largely burnt off in the past. Soviet-developed oil fields and a Czechoslovak-built refinery account for all of Syria's production capacity. The Communist countries have given aid to national oil industries in hopes of assuring a guar- anteed oil supply for Eastern Europe, but this is not succeeding. In January, Iraq stopped oil ship- ments on Soviet account after Moscow refused to pay $17 per barrel, the price Baghdad was de- manding from Western customers. Shipments under previous agreements apparently have re- sumed recently. Earlier Soviet plans to obtain as much as 300,000 barrels per day of Iraqi oil this year-three times the estimated 1973 level-may be scaled down. It also is doubtful that the two parties will agree to long-term deliveries at fixed prices. East European countries, often agreeing to pay the higher prices demanded for Middle East oil, nevertheless also had difficulty in buying oil this year. Libya, however, may become an im- portant supplier to Eastern Europe; agreements signed so far this year call for a doubling of oil exports. Some less-developed countries that purchase Soviet oil are facing problems, in part due to Soviet difficulties in procuring oil from the Mid- dle East. Moscow notified Ghana, for example, that the price for Soviet crude would be raised to nearly $15 a barrel. In other moves, Moscow reportedly reduced its 1974 commitment to Morocco below the 20,000 b/d supplied last year, and it told Bangladesh that it will now have to pay hard currency for Soviet petroleum prod- 25X1 Yugoslavia RESTRAINING THE CONSERVATIVES .77 kenior party leaders are again warning neo- Stalinist zealots to fall into line with established party policy or face stern disciplinary measures. Some of the phrasing revives the question of Soviet intentions toward Yugoslavia, a rare occur- rence since Tito's rapprochement with Brezhnev hit full stride last fall' The warnings almost certainly reflect an eme ing consensus in the leadership that conserv- ative elements are using Tito's drive to tighten party discipline as a screen for attacking their ideological opponents. Tito himself has cautioned against "witch-hunts" or other attempts to alter his moderate internal policies. Nevertheless, con- servative extremists, in boldly agitating for com- prehensive party controls, have recently criticized prominent party dons-like Vladimir Bakaric in Croatia-for their softness toward liberals and nationalists. SECRET Page 17 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET Last week, Edvard Kardelj, Yugoslavia's top ideologue and a close friend of Tito, upbraided those who favor a return to the Stalinist methods of the country's early postwar years. He told a party meeting in his native Slovenia that the ac- tions of ideological "revanchists" amounted to a "reactionary blow" against the "free self-manage- ment of the peoples of Yugoslavia." IBosko Siljegovic, the chief of the presidium's foreign policy commission, elaborated on Kar- delj's charges at a republic party congress in Bos- nia-Hercegovina-a conservative stronghold. He stressed that neo-Stalinists are prone to subor- dinate national interests, even the sovereignty of Yugoslavia, to the fight against imperialism. He added that such factions would inevitably seek foreign military and political support studied attempt to calm the unrest over this troublesome issud7 "?'" rln a speech on March 28, Caetano reassured the ultra-conservative members of the establish- ment by declaring that Portugal would never abandon its African provinces: Caetano also hinted that the military rebels who made a feeble attempt to overthrow the government on March 16 would be dealt with gentlyi. This attitude should relieve some of the simmering discontent within the military over the arrest of the officers who favored a change in overseas policy] Caetano seemed to be acutely aware that more internal disorders might be in the offing. He warned the Portuguese that more anarchy would inevitably lead to the establishment of an "i ?~ ron 1 There is no evidence that the Yugoslav authoritarian regime." Caetano claimed he would part 's conservative zealots have engaged in any not like to see that happen, and his warning illicit dealings with the Soviets. Given the extent probably is a signal that he is under strong pres- of the Tito-Brezhnev rapprochement, Moscow sure to clamp down hard if there is any further might well reject such potentially embarrassing unrest approaches. Charges of anti-Yugoslav activity nevertheless serve as a warning that the party will quash factional activity of any kind. Indeed, Sil- jegovic's allegations are the type of rhetoric that preceded the Yugoslav purges of 1971-72, and the still-fresh memory of these events ensures that his words will not fall on deaf ears-1 7' Vito has so far remained out of the contro- versy, although he has clearly sanctioned Kardelj's and Siljegovic's warnings. Having pronounced only last November his "trust and confidence" in Soviet party leader Brezhnev, Tito probably deems the veiled rhetoric hinting at inimical So- viet intentions to be an uncomfortable but neces- sary course of action. Portugal OVERSEAS POLICY DIVISIVE J1"] jPrime Minister Caetano's refusal to censure either side in the quarrel over Portugal's policy towards its overseas territories appears to be a -7e Vhe only critical remarks in the speech were directed at foreigners, whom Caetano accused of insisting that Portugal surrender its African em- pire while refusing to consider the solutions set forth in General Spinola's book. It was the first time the Prime Minister has mentioned Spinola's book, and his remarks implied that he saw some merit in Spinola's thesis. Spinola has been at the center of the controversy because his book, which gwas published in February, argued that a military solution was impossible and that Portugal's inter- ests would be better served if Lisbon extended greater autonomy to the African provinces) > 'Meanwhile, more problems have surfaced in Mozambique, one of Portugal's' overseas terri- tories. A petition circulating there condemns the church hierarchy in Mozambiquelfor collaborat- ing with Lisbon in maintaining a repressive system that exploits the people of the!, territory. The petition was signed by the bishop of Nampula, who is Portuguese, and by all the members of an Italian missionary order stationed In the Nampula SECRET Page 18 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Last week's election of Nicolae Ceausescu to the new office of president of the republic, and the accompanying personnel and organizational changes, further institutionalize the Romanian leader's predominance. The changes also add a new dimension to an emerging form of socialism that is uniquely Romanian ;Establishment of the presidency weakens bot the existing state council (the corporate "head of state") and the office of premier. The new presidency assumes most of the functions and powers of the council, including its role of supreme representative of the state. Moreover, the president's right to preside over the council of minister effectively undercuts the role of the prem ier Ceausescu strengthened his grip on the party by abolishing the once prestigious Permanent Fiand-picked membership of the Secretariat and the Executive Committee. Ceausescu's presumed chairmanship of the new Standing Bureau, which is charged with coordinating party and govern- ment activity, further enhances his authority, The personnel changes made last week are in .Rion of the "cult of personality') nd that the keeping with Ceausescu's practice of rotating of- coronation-like atmosphere lacked only a crown. ficials between party and state posts. This is part2 After receiving a presidential sash and a golden of his effort to raise the level of managerial com a scepter, he pledged to use his office "to achieve petence and to increase efficiency by finding the the brilliance and grandeur of the Socialist correct balance of loyalty and expertise./ Republic of Romania." The Soviet ambassador ''i he most significant shift was the retirement of 72-year-old Premier Maurer "because of health and age," although he reportedly had policy dif- `ferences with Ceausescu. He was replaced by Manea Manescu, a former deputy premier, a leading economist, and a long-time adviser to (.: Ceausescu. The Romanian leader had evidently found a convenient opportunity to retire Maurer with honor and to replace him with a man of proven loyalty and pliability.) Ceausescu's inauguration as president was a s owy demonstra- was reportedly so chagrined at these events that he initially refused to sign the Bucharest diplo- matic community's message of congratulations.' rOn balance, last week's events seem to mark the beginning of a process that will continue until the party congress convenes late this year. Ceausescu apparently intends to use the congress to put his personal stamp on the structure and membership of all elite party and state organs, while further "creatively" tailoring Marxism- Leninism to purely Romanian circum- stances. SECRET Page 19 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET ISRAEL: ON THE HOME FRONT Nom's+,at rF The partial results oche official inquiry into Israel's conduct of the war last October, which were published this week, are unlikely to mute the controversy surrounding the handling of the war by Prime Minister Meir's government. In effect, the findings clear the government of direct responsibility for the shortcomings uncovered in the investigation and place the blame squarely on the military. The five-member commission, which is headed by Israel's chief justice and includes two former chiefs of staff, chose not to deal with the broader question of ministerial responsibility and focused on the more easily defined issue of mili- tary accountability. Such an approach should for- mally get Prime Minister Meir's government off the hook, but it has raised a storm of controversy and leaves the commission open to charges of conducting a whitewash. Israeli editorials are already claiming that the commission report is suspiciously protective of Defense Minister Dayan, in particular, and are calling on the commission to direct more atten- tion to the activities of the senior political leaders during October. Predictably, the opposition Likud bloc called on the government to accept the moral and political responsibility for the short-comings highlighted in the report and to resign. The Likud is likely to offer a motion of no confidence in the government when the Knesset meets in a special session on April 10 to hear a government statement on the commission's find- ings. The government should be able to withstand such a challenge. Chief of Staff Elazar, who quit in view of the report's findings, complained in his letter of resignation that the report was unfair in treating him differently from Dayan. Professional military men are likely to become more bitter and even demoralized should the commission's final report, expected in late April or May, absolve the govern- ment of direct responsibility and put the burden of blame on the military establishment, This could touch off resignations by officers not impli- cated by the commission. THE OFFICIAL INQUIRY INTO THE WAR FOCUSED ON MILITARY ACCOUNTA- BILITY RATHER THAN MINISTERIAL RESPONSIBILITY. The report bore down particularly hard on the military intelligence staff, charging it with failing to detect Arab preparations for war and improperly evaluating available information. It recommended the removal of intelligence chief Zeira and several other senior military intelligence officers, including Zeira's deputy for estimates. Meanwhile, Mrs. Meir's cabinet avoided an- other potential crisis when the Notional Religious Party's central committee, in a stormy session, voted to endorse the party leadership's earlier decision to join Mrs. Meir's coal',ition. The vote failed to head off the resignation of Social Wel- fare Minister Hazani, who held one of three cabi- net posts allotted to the party. Hazani said his action was motivated by the difficulty he had in reconciling the party's decision to stay in the government with contrary advice from Israel's Chief Rabbinate. Hazani, however, assured Mrs. Meir of his continued support in the Knesset. The National Religious Party remains di- vided over the question of participation in the cabinet without having first obtalined legislation revising the Law of Return to apply only to orthodox Jewish immigrant converts. Despite these strains, the party's other two cabinet members-Interior Minister Burgl and Religious Affairs Minister Raphael-apparen',tly will stay on. The party will not immediately name a re- placement for Hazani, presumably as a gesture to its more conservative wing. SECRET Page 20 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 f The coalition government of Prime Minister Bulent Ecevit, in office since February, is pushing controversial political-amnesty legislation and considering lifting the ban on cultivation of opium poppies. In tackling these issues, it has met behind-the-scenes pressure from conservative mili- tary officers, who are wary of both coalition parties and determined to prevent any deviation from what they consider Turkey's national in- terests./ 1'1- I A general amnesty-particularly for "crimes of t ought -was an important issue in the elec- tion last fall for Ecevit's left-of-center Republican Peoples Party, the dominant partner in the gov- ernment coalition. Senior officers, however, object to provisions in the government's bill that would include in the amnesty those charged with disseminating communist propaganda and with advocating violent overthrow of the government. `J Military leaders have rallied their supporters in parliament and believe the provisions they oppose, which have been attacked by the opposi- tion parties,, will be removed. The controversial provisions are also disliked by fervently anti-com- munist deputies of the Islam-oriented National Salvation Party, the junior coalition partner, although they have reportedly agreed to vote for the bill.) IThe army has also made its weight felt on the opium poppy question. The opposition of most officers to ending the ban on cultivation, a move advocated by both coalition parties during the election campaign, was probably partly responsible for the government's postponement of a decision on the issue until the end of July. The army does not want to complicate relations with Washington, lest it jeopardize US military aid. The ban has been unpopular, however, among peasants in the poppy-growing areas, who are being courted by the opposition parties in antic- ipation of a possible breakdown of the present coalition and early elections. The planting of poppies for seed was resumed on state farms last month to ensure adequate seed stocks for a normal fall planting. I Military pressures on Ecevit's government raise the specter of the March 1971 "coup by memorandum" in which the army forced the resignation of the Justice Party government, led by Suleyman Demirel, and brought about a two- and-a-half year period of rule by military-backed "above party" cabinets. Although the key officers who signed that memorandum have now been retired and the army displayed considerable patience during the three-month crisis that pre- ceded the formation of the present government, it clearly has not given up its role as watchdog. Ecevit reportedly hopes to retire most of the remaining senior officers who supported the 1971 coup. He will have until August-the customary time for retirements -to generate enough support within the military to ensure that there will be no adverse reactions. Turkish farmer in poppy field SECRET Page 21 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET NWrest in the security forces eased during the ast week as moderate elements appeared to gain strength over radicals, and the government took new steps responsive to earlier demands by military and civilian dissidents. The breather may be short-lived, however. Civilian turbulence is growing in the provinces, where townspeople are complaining about local corruption and peasants are becoming increasingly itated over the ex- plosive issue of land reform. Emperor Haile Selassie was forced to accede o demands for an inquiry into corruption among present and former high-level officials to calm the t/IMeanwhile, more serious civilian demonstra- -p'tions occurred during the week in at least half of r.;~Ethiopia's provincial capitals and in numerous other towns in support of prompt action against corrupt and incompetent local officials. Local administration reportedly has broken down in some areas because officials are staying away from their posts or have been placed under house arrest by town smen~Jormally submissive parlia- mentary representati s are becoming more vocal in their denunciation of provincial governors; one deputy called for the dismissal of all 14 gov- ernors, whom he labeled "arrogant mini- dictators.", military unrest. Late last week a seven-man in- vestigative commission was named that includes a J` fhe greatest potential for violence comes police colonel and an army officer. The commis- fron the mass of uneducated rural Ethiopians. sioners are widely regarded as men of integritylthough most of these people apparently remain and competence; two have been prominent in r loyal to the Emperor, they want ,changes in land progressive circles. Initial reaction to the appoint- tenure that will guarantee them their own farms ments has been generally favorable, although the and provide relief from the large rents paid land- US Embassy reports that some reformers in the lords. Stirred up by reports of urban unrest, military doubt the panel packs enough political peasants in some areas have taken matters into weight to carry out a thorough investigation] their own hands, murdering landowners and seizing land.? 11 jArmy and police units in Asmara that had broadcast peremptory demands for swift legal action against official corruption and arrested some 20 police officers have returned to their barracks. Paratroops, however, continue to con- trol the air base at Debre Zeit, where since March 25 they have been containing radical air force personnel who had threatened direct action against the government of Prime Minister Endal- katchew. Tension between the paratroops and airmen remains high. jEarlier in the week the Defense Minister issued a public statement charging that "irrespon- sible elements" in the armed forces-a clear ref- I ?irThe tribal nature of the landlord-tenant con- ct I increases the likelihood of more violence. Landlords are mostly members of the more sophisticated, politically dominant tribes; tenants are mainly members of the poorer, less-educated tribes whose resentment is coming to the surface after years of submissiveness? 'IEndalkatchew has attempted to calm the rowing peasant unrest by promising that the 'government will soon issue a policy pronounce- ment on land reform. The implementation of land reform and the dismissals of provincial officials, if- carried out, will undermine the power of the local erence to the rebellious airmen-had attempted a ,4, nobility and landowners who have formed the coup last week. A demonstration of solidarity with the air force radicals staged by students in Addis Ababa in reaction to the statement was quickly dispersed by riot police.? main power base of the regime.. They may be forced to decide whether to accept or resist the central government's intention to carry out far- reaching changes. SECRET Page 22 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET rMoscow is using its military aid programs in East (6Africa in an effort to increase its influence there. Somalia is receiving MIG-21 jet fighters and a surface-to-air missile system-the most sophis- ticated weapons ever sent to East Africa. In addi- tion, long-dormant aid programs in Uganda and Tanzania are being revived. Somalia, which has been anxious to upgrade its mainly Soviet-equipped military forces, has received 15 MIG-21s this year. The air force flies MIG-15s and 17s, but has only a limited capa- bility to operate MIG-21s-seven pilots are re- portedly trained on the aircraft. THE PURPOSE: FRIENDS AND INFLU- ENCE AT THE EXPENSE OF THE CHI- NESE, AND PORT FACILITIES FOR SO- VIET INDIAN OCEAN NA VAL FORCES. After a hiatus of several years, the Soviets have resumed arms shipments to Uganda. Re- lations between the two countries cooled when President Amin came to power three years ago, but have improved over the past year. Some five MIG-17 jet fighters, ten T-34 tanks and six ar- mored personnel carriers were delivered last Nov- ember. SECRET The increase in Soviet military aid to East Africa appears to represent a pragmatic and opportunistic response tailored to events in each country. Moscow is eager to win friends in East Africa, especially at the expense of the Chinese, and to secure the use of port facilities for its Indian Ocean naval forces. The Soviets are still concerned about maintaining stability in the area, however, and have cautioned the Somalis, for example, about pressing their irredentist claims against Kenya and Ethiopia. Moreover, it is unlikely that the additional Soviet arms will give any recipient a significant military advantage over its neighbors. Somalia, Tanzania, and Uganda do not now have the capability to utilize effectively the equipment currently in their inventories, and the introduction of more sophisticated equipment will only complicate matters. Page 23 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET PERU-CHILE: A VOLATILE BORDER Peruvian and Chilean leaders are attempting each side, which is interpreter' by the other as to dissipate the atmosphere of impending conflict aggressive in nature' that has recently arisen between the two coun- tries. The basic cause of tension-Peru's loss of c19 (Peruvian resentment over the loss of some territory to Chile in the last century-remains, southern territory to Chile in' the War of the however, and both sides are likely to continue Pacific (1879-84) never has been far from the preparations for a possible confrontation surface, but it is coming to the fore as the cen- tenary of the war approaches. the Peruvian mili- '' In a recent press conference, Peruvian Presi- tary has traditionally held that national honor dent Velasco emphasized that absolutely no con)0O dictates that the lost territory must be regained flict existed with Chile. Chilean Foreign Minister by 1979. Reports that Chile may be planning to Huerta has made similarly moderate statements, give Bolivia access to the sea through territory declaring that Santiago wants good relations with that formerly belonged to Peru have exacerbated all countries, especially its neighbors. These Peru's revanchist sentiment. Lima has noted that statements were prompted by military activity by any such move by Chile would be interpreted as a ^2 Territorial Losses'ir he War of the Pacific (1879-1884)' LA PAZ Returned to Peru 1929 - "Tac Arica" tam Aric P4 Retained by Chile - # n'U Antofagasta'- SECRET Page 24 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET violation of their 1929r boundary treaty, accord- ing to which neither country will cede border-area territory to a third power without the concur- rence of the other. Velasco has declared that Peru 'would be happy to see Bolivia regain an outlet to the sea-but only through former Bolivian terri- tory7 Although Peruvian revanchism is the strong- est factor tending to raise tensions between the two countries., ideology may also have been play- ing a role since the conservative military regime took power in Chile. Recent Peruvian military moves that have tended to heighten Chile's fears include the pur- chase of Soviet tanks last fall, the arrival of Soviet instructors in January, and the announcement last month that the army's armored school will be transferred from Lima to southern PeruI fPeru is attempting to strengthen its military posture through foreign arms purchases. It re- cently ordered six Jet Ranger helicopters from the US and has asked Washington to speed up deliveries of armored personnel carriers and mor- tar carriers scheduled for shipment late this year. t Peru now has Soviet T-55 tanks in its inventory and on order. Partly in response to Peru's military pur- chases, Chile has sought to modernize its armored corps. A high-level military procurement team is touring West Germany, France, and the US in search of tanks to replace outdated US models, thus far without success. In the face of turndowns j6y both Paris and Bonn, the team is expected to press Washington for the tanks, as well as for TOW anti-tank missiles and self-propelled artil- lery. Chile already is scheduled to receive 16 M-60 tanks from the US, but it would like both more tanks and an accelerated delivery timetable] I-~ he Chilean Air Force is seeking to increase r its je fighter inventory and to assure an adequate flow of spare parts. Negotiations with the US for a squadron of F-5s are nearing completion. 25X1 1 Peruvian leaders probably are concerned that recent press reports raising the specter of Peruvian aggression, possibly with Soviet involvement, will further isolate the regime from its Latin American neighbors. Lima is sensitive to the fact that Velas- co's government stands out as the most radical in South America, and it apparently does not want to offend further its more conservative neighbors, especially Brazil. In addition, Velasco appears to be interested in bettering Peru's relations with Washington, a policy likely to be made more difficult by reports and rumors that Lima has aggressive plans. Nevertheless, mutual suspicion and hostility are likely to grow. The prospect, therefore, is for a continuing arms buildup on both sides, concurrent with Peruvian efforts to quiet the hysteria through political and dip- lomatic,channels. SECRET Page -25 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET VENEZUELA: NEW DIRECTIONS 113-111 Venezuela's new g nment, c cumulating massive financial resources as a result of high oil prices, is beginning to chart new directions in economic policy. Caracas has adopted a cautious approach, however, and is emphasizing careful preparation before spelling out specific courses of action. In his first major step to fulfill his promise to nationalize the oil industry, President Perez has named a study commission to analyze alternative approaches. The commission, headed by the minister of mines and hydrocarbons, is to report to the President within six months. Congressional action on nationalization is likely to be taken by the end of this year. In a second major decree, Perez has ap- proved a 90-day freeze on prices of goods and services to give the government time to work out a general plan for wages, prices, and employment. The government also has ordered a study to lay the groundwork for a unified national planning effort and has named a commission to study reform of public administration. Minister of Mines Hernandez At current oil prices, Venezuela's revenues could rise by over $7 billion this year, an increase of about 200 percent over last year. The gain may not be so high because of signs that world oil prices are softening; nevertheless the quantum jump in revenue will permit the government to undertakesignificant investments ;in support of its commitment to rapid economic development. Perez has stated that investment will be directed toward areas of high productivity, with emphasis on diversifying exports; industries specifically mentioned are petrochemicals and steel. There are limits, however, to the extent that government spending can be stepped up. Even with a planned increase in exp nditures of 20 percent this year, there could be surplus of over $6 billion. The government is preparing legislation to establish a fund that would use half of the surplus for foreign investment; several US banks have been consulting Caracas about such possibilities. Other excess oil revenue would be used to finance international projects, particularly in Latin America, through multilater4al organizations including the Inter-American Development Bank, the Caribbean Development Bank, the Central American Bank, and the Andean Development Corporation. Caracas also intends to help de- veloping countries import Venezuelan oil at cur- rent prices. Caracas has stated that its further objectives are to increase the export capacity of developing countries and to act as a catalyst for multinational projects, in order to 'Contribute to a global redistribution of income. Concern about growing inflationary pres- sures motivated the decision to impose a price freeze. Even in the first nine months of 1973- before the sharpest oil price increases-the general price index rose 8.7 percent, compared with 3.5 percent in 1972. Domestic price increases last year reflected higher prices for imports and the effects of a poor agricultural crop, in addition to increased demand. Expanded government expend- itures this ear will add to domestic inflationary pressu res. SECRET Page 26 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET BRAZIL: LIBERALIZATION IN DOUBT [Recent actions by the Geisel administration 12 t) cThe action may be intended to discourage raise questions about the President's commitment other intemperate or embarrassing remarks that to some sort of political liberalization might hinder any liberalizing plans the administra- ( tion may still have. On the other hand, a similar incident five years ago ultimately led to the In one instance, for example, Geisel moved-, mposition of Brazil's harshest national security to block the political aspirations of former law, which is still in effect. Geisel's early moves finance minister Delfim Netto, who had hoped to indicate that, despite talk of a possible demo- become governor of his home state, Sao Paulo) cratic opening, the government is still authoritar- Even though Delfim is widely acknowledged as the architect of much of the country's recent economic success, opposition to his ambitions is strong, primarily among military leaders. While he is resented for a number of minor reasons, the fundamental fear of many officers is that Delfim would try to use the governor's position as a base from which to question-and possibly challenge- the military's control of the political system..1 an, and will firmly lay down the rules the participants it selects must play. ARGENTINA: PERON SWITCHES TACTICS 1 a- r ' I n contrast to the heavy-handed measures recently employed to remove Cordoba's governor When Delfim's interest in the governorship 4' and his deputy, the Peron government is using a became clear, Geisel named another former minis-) Llmore gingerly approach in dealing with situations ter as the government's official candidate. To in other troubled provinces underscore his opposition to Delfim, the Presi- dent proposed a draft law that would reduce the already limited role of political parties in the ' In Mendoza, where friction between op- selection of gubernatorial candidates. This move ?r posing Peronist factions has flared sporadically proved sufficient to deprive Delfim of whatever or months, Peron 's conservative (orthodox) fol- overt support he already had among politicians.)- owers are resorting to legal means to remove The regime also may have signaled its displeasure Governor Martinez Baca, a holdover from the with a leading Sao Paulo newspaper that has sup- $' Campora regime with links to the left. Charges of ported Delfim editorially by reaffirming full-scat ~,,?influence-peddling and other malfeasance have censorship after reportedly considering a partia brought calls for his impeachment, and the prob- lifting.; 2d I n addition, a federal deputy of the opposi- tion party, Who bitterly criticized Chilean leader Pinochet when the latter visited Brasilia, has drawn the ire of the administration. The justice minister is preparing legal action against the legis- lator, who is charged with violating a national J.zecurity law that prohibits public offenses against a foreign leader. The government is proceeding along constitutional lines, although it clearly intends to pursue the issue firmly' ability is strong that he will either resign or be removed. Non-Peronists in the province, including leaders of the Radical Party, are loudly endorsing calls for Martinez Baca's ouster. Peron has been careful to cultivate support from other political parties, and he may be striking deals with them in return for favors 5., Intra-Peronist squabbling continues to create problems in Santa Fe and Salta provinces, where left-wing governors are also under attack from orthodox Peronists, but the situation does not appear to be unmanageable. Right-wing Peronist SECRET Page 27 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 SECRET labor groups apparently are having little success in their efforts to unseat the governors, and Peron may be counseling a go-slow approach, especially if he believes popular support for removal of the elected officials is lacking.l 11 Meanwhile, the federal take-over of Cordoba has left deep scars, and the political situation in this key industrial city continues to be shaky. The administrator sent out by Buenos Aires has alienated both right- and left-wing Peronists, thereby complicating his task of pacifying the turbulent Cordobans. The thorny dispute is aggravated by the hostility of the provincial con- 11 jress to federal intervention. Adding to the dif- ficulties, university students have occupied offices at the University of Cordoba to protest the naming of a new rector by federal authorities Unless the sharp differences among feuding government officials, labor unions, and student groups are resolved, the current balancing act will prove to be little more than a palliative. There are signs that tempers are rising on all sides, in- creasing the likelihood that further violent clashes will b rovoked b extremists. SECRET 25X1 Page 28 WEEKLY SUMMARY Apr 5, 74 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1 Secret Secret Approved For Release 2008/06/19: CIA-RDP79-00927A010800020002-1