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Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Secret Weekly Summary Special Report Detente and the Stirring of Soviet Dissidence Navy review completed. State Dept. review completed Secret November 15, 1974 No. 0046/74A N?_ 67 Copy Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 SECRET Socialist realism is an artistically creative method whose guiding principle is the truthful, historically concrete presentation of reality in its revolutionary development, and whose most important task is the communist education of the masses. The Great Soviet Encyclopedia, (second edition, 1957; Vol. 40, p. 180) The lie can pit itself against much in this world, but not against art. Aleksandr Solzhenitsyn Summary the Soviet leadership is faced with a long-standing problem that is entering a new and more difficult phase-how to gain the advantages of better relations with the West without eroding its control over Soviet society. It appreciates the tangible, material benefits and a greater sense of legitimacy and prestige derived from detente, but recognizes that any moves to increase personal and cultural freedom would cause strains in the closed Soviet society. All levels of the Soviet body politic are aware of this conflict, and a variety of groups outside the power structure-intellectuals, minorities, active dissidents, and political prisoners-sense a new opportunity in the recently announced link between an easing of Soviet emigration procedures and US trade policy toward Moscow to press for a more general relaxation of domestic policies. SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Ift?o, L7Lt..flL I Civil Rights Focus on Emigration Some Soviet dissidents, certainly over- optimistically, read the price the regime has paid for US trade concessions as the "opening of the floodgates." Despite the lack of reporting on the subject by Soviet media, the public is becoming aware of the substance of the letters dated Octo- ber 18, exchanged between Secretary Kissinger and Senator Jackson, and the White House clar- ifying statement, tying the emigration issue to passage of the trade reform bill, which would grant most favored nation status to Moscow. Only three days before the US announcement, Brezh- nev publicly reiterated for the record the line that it is impermissible to set conditions for detente. Despite this disclaimer, the negotiations on em- igration are certainly seen by all Soviet citizens, not just Jews, as an unprecedented concession in an area of hitherto sacrosanct domestic policy. The right to freedom of movement within the USSR and, above all, the right to emigrate, have been goals shared by all, not just Jewish, dissidents. Some, at least, go further and consider the core of a general civil rights guarantee for all Soviet citizens. It is this view and its consequences that the regime is apparently intent on curbing and cor- recting, although at what cost is still unclear. The problem must still be a matter of debate within the leadership. This would explain some of the recent signs of contradictory policies in domestic cultural affairs and the seesaw Soviet posture on freedom of movement issues at the European Security Conference. Signs of Conservative Retrenchment The leadership's concern over the potentially corrosive effect of detente-generated popular expectations on its domestic controls is perhaps most readily apparent in the nationwide ideolog- ical vigilance campaign that got under way late this summer. Heralded by the Central Commit- tee's generally critical assessment in late August of party ideological work in the Belorussian Republic, the pervasive campaign has been striking out mainly at "consumerism," nation- Special Report - 3 - alism, religion, and other bourgeois "ills." The drive is designed to improve the technical and ideological expertise of party workers, to rein- vigorate the propaganda apparatus at all levels, and to restore popular faith in the curative powers of Marxism-Leninism. It is thus the most conspicuous sign that a significant relaxation of domestic policy is not imminent. Party conserva- tives probably see the campaign as a major tool for promoting their views; when articles of faith are at issue, moderation can be labeled a vice. Heaping praise on a period characterized by cultural repression is another way open to con- servatives intent on frustrating any change in domestic policy. An editorial in Pravda on the 10th anniversary of Khrushchev's ouster, for example, praised Brezhnev's stewardship over a period of "collective" rule and denigrated Khrushchev's more freewheeling style. In the symbol-studded world of Soviet internal politics, Pravda was also criticizing the relatively liberal cultural policy of the Khrushchev era. More significantly, the sensitive issue of Soviet historical interpretation of Stalin and his rule has again reappeared after a hiatus of many years. Under Khrushchev, censuring Stalin became a symbolic advocacy of a change in the status quo; now even limited praise of Stalin has become a symbol of retrenchment. This weather vane is closely watched by both establishment and dissident cultural elements. The recently announced publication of a revised version of Marshal Zhukov's memoirs is thus another signif- icant negative sign. The book, which as yet is unavailable in the West, modifies a chapter in the original version that questioned Stalin's wartime leadership. Stemming directly from the ideological cam- paign are several recent appointments of veteran ideologists to important and long-vacant posts in the party's central propaganda apparatus. Con- servatives and cultural hard liners have been recently appointed to the chief editorship of the Central Committee's journal Kommunist and of the embattled, but hitherto still relatively liberal, literary journal Novy Mir. SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 JCI.KC Water truck disrupts Moscow art show on September 15 The most dramatic sign of bold conservative action occurred on September 15, when bull- dozers and water cannon were used to disrupt an attempt by Moscow's unconventional artists to stage an open air exhibit. Although the artists received permission to hold a public show two weeks later-and did so-many of them have sub- sequently reported that they have been subjected to increased official harassment. Some have been charged with "parasitism," i.e., failure to hold gainful employment, and one was pressed to sign an affidavit renouncing any intention to organize or participate in similar future exhibits. Moreover, an article in the Moscow party organization's daily on October 17 indirectly praised the ideo- logical work of the district in which the disrup- tion of the initial show occurred. The message seemed to be that the original decision to prevent the exhibit was correct, even if the methods used were excessive, and that the subsequent permis- sion to hold the show should not be regarded as precedent setting. The only statement on this issue so far by a member of the leadership came on November 10 Special Report -4- 4 - when President Podgorny said that "the slightest when departure from our principles is inadmissible in any kind of art." Speaking on the 150th anniver- sary of Moscow's Maly theater, Podgorny tied his warning against any deviation from socialist realism to the ideological campaign by adding that art must be used to combat "apolitical, con- sumer psychology." The conservatives' jealous defense of domes- tic controls and stonewalling on cultural issues are inevitably reflected in their opposition to eased emigration procedures. There are sporadic but continuing reports of harassment of Jewish activists and of Jews who have declared their intention to emigrate. Since the US Congress has not yet passed the trade bill, the Soviet regime probably does not regard these actions as a breach of the US-Soviet understanding. A number of Soviet Jews, however, have already made that charge in public statements. Moreover, isolated reports of continued harassment of non-Jewish would-be emigrants by Soviet officials are intensifying fears among SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 non-Jewish dissidents in Moscow that the regime is determined to restrict any easing of emigration to Jews, despite the non-exclusive wording of the Kissinger-Jackson letters. The Other Side of the Ledger Along with these signs of intent to preserve the status quo are others suggesting something less than total inflexibility in the Kremlin. One such sign came on September 2, when a monument for Khrushchev's grave-a bust of the former leader by maverick sculptor Ernst Neiz- vestny-was unveiled at Moscow's Novodevichy Cemetery. The sculptor, a Jew, began work on the monument at the request of the Khrushchev family soon after the leader's death in 1971. Permission to install it was withheld, however, until mid-April of this year; Neizvestny claimed that the decision was conveyed to him by a person close to Brezhnev. The unveiling of the monument was prob- ably seen by Moscow's unconventional artists as evidence of a partial rehabilitation of Khrushchev and of official acceptance of Neizvestny's own unconventional work. They may have been en- couraged by this to try to stage the open air art show, hoping the move also signaled a shift in the direction of the more relaxed cultural policies of the Khrushchev era. Although the attempt itself was a fiasco, the dissidents were no doubt heartened by the confusion in the Moscow city bureaucracy following the disruption of the show, signs of high-level intervention, and the successful staging of the second exhibit. Moreover, in early October the party chief of the Moscow district in which the initial disruption occurred was ousted-evidently as a scapegoat-and sent into diplomatic exile as ambassador to Hanoi. On Oc- tober 4, a deputy editor of Pravda privately apologized to a US embassy officer for the manhandling of US correspondents during the aborted art show. In the midst of these events the daily paper of the Communist Youth League on September 17 published what could only have been viewed as an implicit defense of Khrushchev's rewriting Special Report -5- SECRET Sergei Khrushchev viewing the newly unveiled monument for the grave of his father Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 JCl.rrsiz of Stalinist history. The reviewer of Ivan Stadnyuk's War, a novel glorifying Stalin's war- time leadership, rebuked the author for glossing over Stalin's errors and failing to take into ac- count "the clear assessments of our historical science." This was the first positive endorsement of Khrushchev's rewriting of Stalinist history to appear in years. Whether the review was a stimulus or a response to the apparently pro- Stalin revision of the Zhukov memoirs is a moot point; it is the re-emergence of the symbolic debate between advocates and opponents of the status quo that is significant. Another series of positive signs, contrasting with the continued harassment of individual Jewish would-be-emigrants, has been the selective but markedly more lenient posture toward the Jewish community in Moscow. For example, the public religious observances of the holiday of Sirnchas Torah in October proceeded without the customary harassment in front of the Moscow synagogue by the police. Another case in point is the unusual course of the trial of Viktor Polsky, a prominent Jewish activist. Polsky was charged with having struck a girl with his automobile. The victim is the daughter of a man identified in 1972 as a ranking official of the USSR Procuracy. Polsky contended that the girl had leaped in front of his car in a suicide attempt. Polsky, a physicist, lost his job soon after he applied for emigration and claimed he had been "hounded" because of his desire to emigrate. At the trial, however, a physician who treated the girl after the accident appeared "unexpectedly" to testify in Polsky's defense, an ambulance driver corroborated Polsky's account of the incident, and the defense attorney-a Jew---successfully undercut the testimony of prosecution witnesses, including that of the girl's father. Moreover, prominent Moscow dissidents, among them the wife of Andrey Sakharov, and several Western correspondents were admitted to the courtroom. Polsky was found guilty only of negligence, was sentenced to pay a nominal fine, and was released. These examples of leniency suggest that at least some elements of Soviet officialdom have been instructed to try to avoid adverse Western publicity, especially while the trade legislation is still pending in the US Congress. This interpreta- tion is reinforced by the failure of Moscow police Unconventional art show on the outskirts of Moscow on September 29 Special Report -6- November 15, 1974 SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 ,"..+ JCL,rstz I . to arrest three young Jews who on October 29 demonstrated in the streets for the right to emigrate to Israel. It was the first such demonstra- tion since the announcement of the US-Soviet emigration understanding. An Uncertain Prognosis The conflicting signs in Soviet policy in the area of human rights suggest that the leadership is still debating the issue of greater flexibility, Podgorny's remarks on November 11 notwith- standing. Podgorny, generally identified with cul- tural conservatives, clearly does not have the last word on cultural policy. The leadership's discussion almost certainly hinges on the price, i.e., the benefits accruing from detente, being right. Recent events also show how vulnerable the regime's domestic practices are to Western publicity, and both the leadership and the dissidents are well aware of this. Kremlin advocates of detente may believe that some relaxation of domestic controls will deflect adverse publicity and help the Soviets in other areas of East-West negotiations. They may fear that if incidents like the art show are handled piecemeal, the energies of the leadership as a whole will be sapped, and latent divisions on other policy issues could rise to the surface. The leadership will be concerned that evidence that it was not adhering to its bargain with the US on emigration would be viewed by influential segments of Western political opinion as casting doubt on Soviet good faith in other detente-related negotiations. The leaders are prob- ably not of one mind in their assessment of what the West would regard as non-adherence, but they are almost certainly agreed that they must try to limit the domestic impact of the emigration accord as much as possible. In the short term, they will probably test US determination to insist on the terms of the agreement. The longer trend Special Report - 7 - An example of socialist realism, raised to the heroic scale, is this monument in the heart of Donetsk honoring the coal miners of the Don Basin. Similar massive statuary, featuring mus- cular workers and peasants, dots the Soviet landscape. SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 SCUHL I Religious services conducted in Moscow's central synagogue could be toward some easing of internal condi- tions, providing the relaxation appears to the public as the regime's own decision and not-as in the case of the art show-an embarrassed response to internal and external pressure. This will not be an easy task. So far, the generally fragmented nature of Soviet dissidence has been an asset to the regime. The dissidents, though often vocal, are numerically insignificant, and the Soviet masses are generally apathetic and unsympathetic. Although the dissidents are spread thin over the political spectrum, and frequently divided on both goals and methods, they are united-as were their historical predeces- sors---in their desire to gain the right to voice unorthodox views. They are united in viewing the foreign press as a pulpit without which their voices would now be ignored. And they all sup- port the right to emigration-despite the ambigu- ous feelings arising from the traditional Russian attachment to the motherland. Some dissidents, like the democratic group clustered around Andrey Sakharov, support emigration as a matter of principle; others, such as the authoritarian Russian nationalists, frequently favor it for anti- Semitic reasons. The emigration issue is also likely to embolden Soviet dissidents to test the limits of the regime's flexibility on other matters. Sakharov has announced that the hunger strike he claims occurred in several Soviet labor camps on October 30 will become an annual event. Mos- cow's unconventional artists have announced plans to stage a second, indoor, public exhibit of their work in December. Their colleagues in Leningrad are pressing authorities there to permit a similar public show. All concerned probably view the coming months as a test of both Soviet and Western attitudes, and the dissidents may anticipate a period in which they have a new weapon--Western attention to the emigration agreement--to advance their cause Special Report SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Secret Secret Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Secret Weekly Summary Secret No. 0046/74 15 November 1974 Copy NO Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 The WEEKLY SUMMARY, issued every Friday morning by the Office of Current Intelligence, reports and analyzes signif- icant developments of the week through noon on Thursday. It frequently includes material coordinated with or prepared by the Office of Economic Research, the Office of Strategic Research, and the Directorate of Science and Technology. Topics requiring more comprehensive treatment and therefore published separately as Special Reports are listed in the contents. CONTENTS (November 15, 1974) WESTERN HEMISPHERE EAST ASIA PACIFIC SPECIAL REPORT 1 Middle East: Options Narrow 2 Palestinians at the UN 3 Austerity Measures in Israel 4 Greece: First Elections in a Decade 6 Turkey: New Prime Minister Named 6 EC Searches for Energy Policy 8 Spain: New Defense Ties with US 8 Western Europe: Civil Aircraft 10 Italy: Critical Crossroads 11 USSR: Anniversary; Lunar Mission 12 Bulgarian Government Changes 13 Whither the OAS? 14 Bolivia: Elections Canceled 15 China-USSR: Peking Proposes Nonaggression Pact 16 Vietnam: Calling for Talks; Military 17 China: Mao Sets the Tone 18 A Troubled Japan 20 South Korea: Recession (Published separately) Detente and the Stirring of Soviet Dissidence Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 25X1 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Next 1 Page(s) In Document Denied Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 `,r J C Ir K C I % ..r The Middle East: Options Narrow Arab and Israeli reaction to Secretary Kis- singer's visit last week, as reflected in their respec- tive media, has been muted, and neither side has struck any notes of optimism on the prospects for further peace negotiations. The circumspect press commentary is partly due to the fact that so little information on the visit has been made public. Even more, it probably reflects recognition on all sides that the options for restoring negotiating momentum have narrowed considerably since the Arab summit last month. Both Egypt and Israel still appear to be focusing on a further disengagement in the Sinai as the only means of breaking the present dead- lock. The Israeli press has speculated that Secre- tary Kissinger may pursue this subject in another visit to the Middle East next month or else invite Egyptian and Israeli representatives to begin talks then in Washington. Israeli Foreign Minister Allon, however, has stated publicly that "a great deal of clarification is needed before negotiations can be revived." The US embassy in Tel Aviv adds that the Israelis are not optimistic because, as one leading daily noted, there is an "abysmal gap" between Israel's demands for a political settle- ment with Egypt and the more narrow military agreement Egyptian President Sadat is prepared to concede. During the Secretary's visit, Sadat publicly affirmed his belief that a step-by-step approach remains viable, and he clearly would prefer to pursue unilaterally a further disengagement in the Sinai. Nevertheless, there were indications during the Arab summit that he was heavily pressured by other Arab leaders not to proceed before extract- ing a commitment from the US and Israel that Syria would also be included in any future phase of negotiations. Syria thus continues to play the pivotal role. Prospects for breaking the deadlock on the Arab side appear to hinge on whether or not President Asad believes that Sadat is ready to insist on linking another Israeli withdrawal in the Sinai with one on the Golan Heights. Sadat has continued to hedge his bets on this subject in public. He has claimed both that the Arab summit decisions have not impaired Egypt's freedom to negotiate and that future negotiations must be "on all fronts." Despite the persistent Syrian misgivings about a step-by-step approach and about Egypt's attitude, it seems most likely that Sadat has had to give Asad some private assurances that Egypt will demand simultaneous progress in negotiations and, perhaps, even that Egypt will support Syria if it is attacked. The crucial question at the moment appears to be whether or not Syria can be sufficiently mollified to allow some form of preliminary Egyptian-Israeli talks to take place that could be billed as the first step in a "simul- taneous" negotiating process. Syria's principal concern is that the opening of any new Egyptian-Israeli discussions would reduce its leverage on Israel and give Tel Aviv an excuse for postponing further any consideration of concessions on the Golan Heights. Earlier this month, Prime Minister Rabin reiterated that Israel is ready to resume negotiations with Syria, but there have been no indications that the Israelis are preparing to make new proposals. If Israel con- tinues to balk, Asad could attempt to force the issue by pressing for reconvening the Geneva con- ference. What Syria does about the renewal of the mandate of the UN observer force on the Golan front, which expires at the end of this month, has been regarded as a key indicator of Asad's attitudes and intentions. Speculation continues that he may refuse to extend the mandate to demonstrate at home and abroad his dissatisfac- tion with Israel's failure to offer concessions. This week there were some signs that military con- siderations could prevent Asad from playing this card. SECRET Page 1 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Asad's military advisers presumably rec- ognize that hostilities, once begun, could not be confined to a repetition of the artillery duels and patrol actions that Syria employed to reinforce its bargaining points in the disengagement talks last spring. If Asad should decide that ending the mandate involves too much risk of a destructive Israeli attack, he might justify a limited extension of a few months as necessary to allow time both for more vigorous diplomatic efforts and for the completion of military training and defense con- struction programs. When Asad makes his play on the mandate issue, it will be based as much on political as on military factors. He probably believes that the25X1 negotiating options have not yet been completely exhausted. As usual, however, he has his cards Palestinians at the UN Palestine Liberation Organization chief Yasir Arafat asked the UN General Assembly on November 13 to back the Palestinians' right to return to their homeland, to determine their own future, and to establish a national authority on any Palestinian territory "from which Israeli occupation is removed." These points were drawn from a com- prehensive policy statement approved by the PLO's parliamentary body in Cairo last June. Arafat, in his address at the UN, did not repeat the more radical planks of that platform, notably the standard PLO threats directed at Israel. In June, Arafat approved a statement that the PLO would use all means, "foremost of which is armed struggle," to liberate Palestinian land; at the UN, he asked that there be no more bloodshed. Arafat did not repeat either the Palestinians' usual rejection of UN Security Council Resolu- tion 242, which provides the legal basis for the Geneva peace talks, or their frequent denuncia- tions of Jordan's King Husayn. These omissions almost certainly reflect the PLO leaders' current inclination to hint at compromises with Israel and Jordan in the hope of gaining a meaningful role in peace negotiations and eventually winning control of a truncated Palestinian state. Arafat's resort to intangible appeals for justice for the Palestinians and his tactic of avoid- ing threats to Israel were designed to gain wide support for the Palestinians and to avoid giving offense to Israel's backers, particularly the US. The PLO chief decried US support for Israel, which he charged is not in the interest of the "American masses." He appealed to the American people for friendship and for more fruitful rela- tions with the Arab world. Because the Palestinians have no official status at the UN, Arafat did not offer a specific proposal for a resolution on the Palestine question. Such a proposal will be introduced later in the debate, probably by Egypt. Debate on the Palestine question is expected to last until November 21. In order to ensure that its views are heard, Israel has reserved the right to address each session. The Arabs responded by claiming the same prerogative for Syria, their spokesman. In an initial reaction to Arafat's UN speech, Israeli Prime Minister Rabin said it challenged Israel's very existence and was made on the assumption that Jews have no right to a state. Rabin emphasized, however, that Israel would continue the search for peace with the Arabs in every way-directly or indirectly. Arab residents in the Israeli-occupied West Bank staged several demonstrations in support of the PLO this week. A general strike called for on the West Bank by PLO broadcasts to mark Arafat's UN debut met with only limited success, however, in the face of intensive Israeli pressure. The major exception came in Nablus-long a hotbed of anti-Israeli activity-where the strikes was almost totally effective. SECRET Page 2 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 V L.VI l" I N` eI Nwe The cabinet announced a number of new economic measures this week, highlighted by a 43-percent devaluation of the pound. The new measures are the latest in a series of steps designed to correct the country's economic ills caused by the burden Israel's military program places on the country's resources. Last July the government implemented a number of measures aimed at slowing the rate of inflation and trimming nonessential budget outlays. A third economic package that will concentrate on wage, income, and tax reforms has yet to be announced. The latest measures deal almost exclusively with slowing Israel's foreign currency drain. In addition to the devaluation of the pound from 4.2 to 6 per US dollar, the government has moved to: ? Freeze imports of certain luxury goods, including autos, for six months. ? Raise the foreign travel tax. ? Increase utility taxes and the prices of petroleum products. ? Reduce subsidies on many basic com- modities. ? Extend the national wage agreement for one year. Finance Ministry officials said the new eco- nomic program was made imperative by the large decline in foreign exchange reserves. At the end of September official reserves stood at $1 billion, a drop of $800 million since the beginning of the year. According to Israeli officials, the new measures will save an estimated $700 million in foreign exchange. Israel's current account deficit has soared to $3.5 billion this year from a deficit of only $1 billion before the war. Arms purchases from abroad have accelerated and put added pressures on reserve holdings. Defense imports this year will probably total $2.4 billion, compared with $500-600 million a year before the war. Although the US is covering the bulk of Israel's arms imports with official aid, Israel apparently has purchased up to $400 million in arms under commercial contracts. The sharp rise in world food prices also has contributed to Israel's trade woes. The new measures will surely aggravate infla- tion, which has increased 40 percent since the war. The reduction in basic foodstuff subsidies alone has caused the consumer price index to rise 17 percent-some officials are speculating that prices could rise as much as 50 percent within a year. Much will depend on whether the Histadrut labor federation, whose support is vital to the program's success, agrees to go along with the government's desire to hold the line on wages. Prime Minister Rabin's bargaining position was strengthened when the Knesset voted 59 to 41 on November 12 to approve the economic package. Nevertheless, Rabin will probably have to make some concessions to the Histadrut. The govern- ment has already promised to work with the union to ameliorate the effects of price increases on low income groups, large families, poor elderly people, and welfare recipients. Although the Israeli public anticipated many of the government's actions, their severity when officially unveiled came as a shock and led to a series of demonstrations, brief strikes, and rioting in parts of Tel Aviv. Arabs in the Israeli-occupied West Bank-which is closely linked to the Israeli economy-also demonstrated against the rise in price of basic commodities. Violent protests such as occurred in Tel Aviv were the exception, how- ever. Press commentary on the new program was generally favorable, conceding the necessity for harsh measures, but cautioning the government to ensure that their impact is distributed equitably. SECRET Page 3 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Austerity Measures in Israel Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 The conservative New Democracy Party led by Prime Minister Karamanlis is favored to win the elections this Sunday. Much is riding on voter confidence in Karamanlis, who has made his experience and proven ability to govern one of the main issues in the campaign. The size of his victory will determine how flexible he can be on Cyprus, NATO, and in relations with the United States. It will also influence Greece's future politi- cal structures, as the new parliament is em- powered to revise the constitution. Should Karamanlis fail to gain an outright majority in parliament, he will form a coalition government with the centrist Center Union - New Forces led by George Mavros, which is expected to come in second. Such a coalition would be much like that which took over this summer when the military stepped down. Mavros is less flexible than Karamanlis on Cyprus and NATO and less favorably disposed toward the US. A coalition dependent on Center Union support might therefore prove unwieldy at times, but can be expected to keep Greece on a basically pro- Western course and act responsibly on the Cyprus and Aegean issues. Issues in the campaign have been over- shadowed by the leading personalities, most of whom were active in politics before the 1967 military coup. The parties have been recon- stituted, however. Karamanlis has dropped con- servatives who collaborated with the junta and has tried to broaden the base of his support by bringing in a large number of new faces. Mavros has picked up several colorful candidates who had been associated with resistance to the junta, such as the would-be assassin of ex-President Papa- dopoulos. Mavros' leadership and party organiza- tion is weak, however. More important, as Kara- manlis' former foreign minister, he has found it difficult to establish a separate identity for him- self and his party, which is, in many ways, ideologically similar to that of Karamanlis. Popular discontent with the past seven years of military rule plus anti-American sentiment over Cyprus provide the left wing with promising ter- rain to exploit, but the left is split between Andreas Papandreou's Panhellenic Socialist Move- ment and the United Left. Papandreou has been exploiting themes of betrayal in Cyprus, hostility to NATO, neutralism, a vague socialism, and anti- Americanism to obtain considerable popularity among intellectuals, radicalized students, and youth.. He is mistrusted by the farmers and the middle class, as well as by the establishment, however. In addition, complicated registration procedures and the requirement that voters must cast their ballots in their place of origin may limit the turnout of student voters. Papandreou is also running more political unknowns than any other party and is fielding candidates in only 38 out of 56 electoral districts. He and the Center Union - SECRET Page 4 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 New Forces are expected to split about 40 per- cent of the vote, with the Center Union getting the larger share. The United Left, a grouping of two Commu- nist parties and a former communist-front group, is the only major group in the election that has been ruled a coalition by the Supreme Court. This means that the United Left must obtain 30 per- cent of the vote in order to be eligible to partici- pate in more than the first "distribution" of seats under Greece's complicated proportional repre- sentation law. Most observers do not give the United Left more than 15 percent of the vote. With perhaps as much as 30 percent of the vote the leftist groups-the United Left plus Papan- dreou-could be a vocal factor in the new parliament. Except for Papandreou, the parties have treated the Cyprus issue gingerly. They all sup- port a solution "safeguarding the rights" of their ethnic brothers on the island. The Panhellenic Socialist Movement and the United Left have urged the return of Archbishop Makarios. The Center Union urges a solution through inter- communal talks, while Karamanlis has been re- minding voters that a strong Greek government with a decisive policy is in the best position to handle the Turks. Punishment of those who supported the junta has been a key issue. Karamanlis has de- fused it somewhat by exiling the five key mem- bers of the junta that overthrew the civilian gov- ernment in 1967 and promising legal action against them. He has avoided taking harsher measures in order not to alarm the army and the extreme right. Right-wing forces, represented by the Na- tional Democratic Union led by Petros Garou- falias, are unlikely to win more than 5 percent of the vote. They are apprehensive about the legal- ization of the Communist Party and other mea- sures they interpret as a leftward drift, but appear to be willing to give Karamanlis time to work things out. Although pro-junta forces cannot be completely discounted as potential perpetrators of a coup against Karamanlis, they probably lack sufficient support in the army to bring Kara- Sweden, Austria, and Switzerland have decided to join the US-backed International Energy Program but with certain conditions attached that relate to their neutrality. The decisions represent an important political milestone, given the fact that the neutrals have heretofore consistently avoided align- ment with any politically committed group. Joining the program will mean a break with that tradition, even though it does not por- tend moves toward closer cooperation with Western Europe on political and security matters. The realities of the oil shortage and the memory of last winter's oil embargo com- pelled the three to give serious consideration to joining. Each is concerned, however, that its neutral status not be compromised. In or- der to soften the impact of an affirmative decision and to justify it domestically, the three are insisting that a neutrality statement be attached to final acceptance of member- ship. The neutrality declaration is not in- tended to act as an escape mechanism, and the three have promised to adhere strictly to the obligations of membership. The International Energy Program was developed by the Energy Coordinating Group established last February in Washington. Un- der the emergency plan, the US, Canada, Ja- pan, and all of the EC countries except France would share oil reserves and reduce energy consumption in the event of a future oil embargo or cutback in production. Eu- rope's other neutral, Finland, reportedly is studying the possibility of some sort of affilia- tion with the IEP, but will have to consider the likely Soviet reaction before making a manlis down. Nonetheless, the unofficial cam- paign slogan of New Democracy-"Karamanlis or the tanks"-is probably an effective reminder for the voter of the past seven years of military dictatorship. SECRET Page 5 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Jtuht TURKEY: NEW PRIME MINISTER NAMED With the naming of Sadi Irmak as Prime Minister-designate, President Koruturk appears to have found a formula for breaking the eight-week- old political stalemate. Irmak, a political neutral, has begun a series of talks with leaders of Tur- key's major political parties in an effort to put together a broad coalition that will move the nation toward early elections next spring or sum- mer. The breakthrough apparently came after President Koruturk threatened to resign unless the party loaders reached agreement on forming a government. Democratic Party leader Bozbeyli then proposed a broad coalition government that would be headed by an independent and would exclude the participation of party leaders. Most of the party chiefs had rejected former Prime Minister Ecevit's call for early elections as a con- dition for a new government, but Koruturk re- portedly has persuaded them to accept that idea as well. tion" composed of all the major parties except the National Salvation Party, Ecevit's former coalition partner whose disruptive tactics brought about the current government crisis. The 70-year-old Irmak, who was inactive in politics for 24 years before he was named to the senate as a presidential appointee this year, will have difficulty molding this disparate group into a working government. His primary role will be to act as caretaker until new elections can be held that will give one party or another a clear mandate to govern. Despite the preliminary approval the party leaders have given to this formula, Irmak still has several hurdles to clear. The formal process of organizing a government requires Irmak to: ? Name a full cabinet, which with presi- dential approval will become the acting gov- ernment of Turkey. ? Prepare a government program for sub- mission to parliament. ? Present this program for debate and a vote of confidence. There are a number of pitfalls along the way, particularly the distribution of cabinet portfolios. Although the agreement arranged by Koruturk reportedly calls for the coalition parties to share the posts on a basis proportional to their repre- sentation in parliament, disputes could arise over which parties will get the more prestigious assign- ments. Irmak could also run into difficulty persuading parliament to go along with early elec- tions, inasmuch as many of the deputies will fear that Ecevit's national popularity-as a result of Cyprus-will carry his Republican People's Party to victory. Except for the right-wing National Salvation Party, there appears to be general agreement among Turkey's political leaders on policy toward 25X1 Cyprus. Irmak has announced that he plans to continue the Cyprus policy of former prime minister Ecevit, For inis er dunes is likely to succeeds in forming a "national coalition," it might defuse Cyprus as a political issue by sharing among all the likely contestants in the next elec- tion the accolades or blame resulting from any effort to negotiate a settlement with the EC SEARCHES FOR ENERGY POLICY EC deliberations on a common energy policy are picking up after being stalled for years. There is concern lest community functions be usurped by the new International Energy Agency to be inaugurated November 15 as an autonomous body within the Organization for Economic Coopera- tion and Development. Movement on an EC SECRET Page 6 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 policy is also seen as a way to induce France to join the international agency and to assure a role for the EC as an entity in the conference between producers, consumers, and developing countries that France has proposed. French President Giscard's bid for a confer- ence early next year to discuss oil prices caused embarrassment among Paris' EC partners. They have not wanted to rebuff a French initiative, and they share to some extent the French desire to avoid an atmosphere of "confrontation" with the Arab producers. Nevertheless, they know that the French plan would not adequately allow for the prior development of a consumer position, one of the principal aims of the US-backed international agency. France also wants a common EC policy that would, among other things, lay down guidelines for restrictions on consumption and for developing alternative energy sources. Most of France's partners may now be taking a friendlier look at EC Commission proposals along these lines, not least because agreement on EC measures-even in a watered down form-could be hailed a success of the December summit of the Nine. French Foreign Minister Sauvagnargues him- self made an attempt at this week's ministerial EC political cooperation meeting to marry Paris' own earlier proposals with Commission proposals and to take account of responses to the conference idea. While calling for agreement by the summit on elements of an internal EC policy-deliberately left vague as to targets and dates in order to minimize possible opposition-the new proposal is more positive about the contribution the inter- national agency could make toward cooperation among consumer countries. In return, the French want the EC leaders to "note with satisfaction" France's proposal for the consumer-producer con- ference and to agree that the EC intends to participate in it as a single entity. France's conciliatory suggestions-including an observer role for the Commission at the inter- national agency-found initial favor among the SECRET Sauvagnargues (r) and Irish Foreign Minister Fitzgerald (1) at the meeting Page 7 WEEKLY SUMMARY Nov 15, 74 Nine, although the British still appear quite reserved about the consumer-producer meeting. By aiming at positive decisions at the December summit, Paris may be implicitly recognizing its partners' criticism that a "preparatory meeting" this month for the consumer-producer conference would be premature. Although Paris will continue to press for such a conference, which would enhance French pretensions to be an honest broker between con- sumers and producers, this week's EC meetings seem to have reinforced the priority to be given consumer cooperation within the international agency, on the one hand, and to establishing common EC internal policies, on the other. The UK may still be an obstacle to early agreement on internal measures. London would prefer that the summit give a boost to the Labor government's hopes for renegotiation of its EC membership terms rather than concentrate on energy matters. 25X1 Differences between France and its partners persist, moreover, over how free a common EC oil Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 ,J L_ V I IL_ I SPAIN: NEW' DEFENSE TIES WITH US Spanish negotiators formally advised a visit- ing US delegation last week that Madrid intends to seek a new defense relationship with the US. For some time the Spanish press has been citing the inadequacy of the present agreement of friendship and cooperation that covers US use of base facilities in Spain. Suggested solutions have ranged from calls for a mutual defense treaty all the way to demands that the US get out. During the initial round of negotiations on renewing the present agreement that expires next September, the Spaniards stopped short of asking for a mutual defense treaty. Nevertheless, by em- phasizing the desirability of joint military planning and coordination of the Spanish defense role with that of the US and NATO, the Span- iards made it clear that a treaty is what they want. The Spaniards are trying to use the bilateral Declaration of Principles governing relations be- tween Spain and the US, which was signed in July to parallel the NATO declaration, as a lever to get a firmer defense tie. They argue that the declara- tion went beyond the provisions in the present agreement governing the use of defense facilities in Spain and signaled a stronger US commitment to grant the Spaniards the same treatment in the defense field as that accorded the NATO allies. Consequently they want the new agreement to incorporate the spirit of the declaration. The Spaniards argued that they could no longer justify to their people the increased threat to Spain brought on by the presence of US bases without being able to cite closer Spanish defense ties to the West. The principal US negotiator has asserted the willingness of the US to continue and strengthen defense . cooperation, but argued that the US believes this could be accomplished within the framework of the current agreement. The next plenary session will be held early next month in Washington. The agenda will cover the nature of the defense relationship and closer coordination of Spain's defense planning with that of the West. The chief Spanish negotiator Page 8 stated that these two items constituted the main concern of his government and would have to be agreed upon before Spain would consider two other items proposed for future meetings: renego- tiation of terms governing use of facilities pro- vided to the US as well as conditions governing their utilization, and renegotiation of the military quid pro quo. Two additional items were also proposed: economic, technical, and cultural coopera- tion-which will be considered by specialized study groups-and the composition and function- ing of joint institutions to administer the agreement. At the December session the Spanish nego- tiators can be expected to make a strong pitch for a treaty in spite of US warnings of the difficulty of getting congressional ratification. This will re- flect sentiment expressed with growing frequency in the Spanish press that Madrid is negotiating from a position of strength. The installation of a leftist government in Portugal and the threat to the eastern flank of NATO created by the Cyprus crisis may have convinced Madrid that base rights in Spain are all the more vital to US interests and will enable Spain at long last to insist on the security treaty that many Spanish officials have Western Europe CIVIL AIRCRAFT SALES DOWN Major manufacturers of civil aircraft in Western Europe--concentrated in France, the UK, West Germany, and the Netherlands-have been rocked by new developments in the already troubled industry. ? Recent financial reports show severe losses for many international airlines, includ- ing several in Western Europe. ? Spain's Iberia Air Lines canceled an or- der for four of Europe's consortium-built A-300 Airbuses. Ironically, Spain is a member of the consortium. SECRET WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 ? Hawker-Siddeley decided to halt devel- opment work on the new four engine HS-146, a 70-100 passenger short-haul feeder-line aircraft. These events are part of the general eco- nomic uncertainty facing the civil aircraft in- dustry in Western Europe. Rising fuel costs and lagging traffic demand are cutting into the opera- tions of many international airlines, and the car- riers are reluctant to make commitments for addi- tional aircraft, either in Europe or elsewhere. Consequently, Europe's consortium and national aircraft programs have suffered, and the industry has kept going only because there are still back- logs of unfilled orders. Both of Europe's major consortium air- craft- the Anglo-French Concorde and the Air- bus-are in trouble. Despite technological suc- cesses, mounting costs for the Concorde are se- verely limiting sales. French support-which in the past was unwavering-now appears in doubt. Some government officials have mentioned that any aircraft produced after the initial production run of 16 might cost $90 million. At the current $45-million price, which is triple the original esti- mate, only 9 Corcordes have been sold to the captive markets of Air France (4) and British Airways (5). Iran, which may buy 2 by the end of 1974, is the only other country expected to pur- chase the aircraft in the near future. Orders for the A-300 Airbus-a joint effort of five European countries-have been poor. Sales were hurt by delays in early production schedules in 1969-70, allowing US manufacturers to get at least a two-year jump on deliveries of the similar widebodied McDonnell Douglas DC-10 and Lock- heed L-1011. These delays, coupled with lagging traffic, have limited sales over the past several years to 23 aircraft-less than one tenth of the estimated break-even point of 250. Despite this slow pace, however, many Europeans remain opti- mistic about the aircraft's long-term prospects. The failure of consortium programs has undermined many of Europe's national civil air- craft activities. In France, problems have been compounded by a host of difficulties with new aircraft, including the 150-passenger Mercure, the feeder-liner Falcon 30, and the Corvette Exec jet. In the UK heavy costs involving the Concorde have undermined development of new com- mercial aircraft and forced the industry to rely on existing orders for aircraft currently in produc- tion. West Germany and the Netherlands have benefited from lesser involvement in the major consortiums and met with some success in the 25X1 jointly manufactured F-28 and the new VFW Fokker 614, both shorter range aircraft of a type not currently being produced elsewhere. SECRET Page 9 WEEKLY SUMMARY Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 StLF-i~ I ITALY: CRITICAL CROSSROADS The search for a new Italian government entered a decisive phase this week. Although there is no hope for reviving the center-left coali- tion in the immediate future, Foreign Minister Moro may secure agreement on a formula for a caretaker government that would keep the cen- ter-left alive in principle. His negotiations, how- ever, have left the dominant Christian Democrats in a difficult position. Moro, who leads the Christian Democratic left, is trying! to set up an all-Christian Democratic cabinet supported in parliament by the other coalition parties. During the postwar period, Italian politicians frequently resorted to this arrangement--the so-called "monocolore" govern- ment-to let the dust settle after a major political blowup. Such an administration would preserve a semblance of partnership among the parties and could pave the way for a later attempt to resusci- tate the center-left coalition, still the only work- able non-Communist government that can be drawn from the present parliament. Among the former coalition partners, only the Social Democrats refuse to support such a solution. The Social Democrats have maintained throughout the six-week-old crisis that any gov- ernment relying on Socialist support would be "open to the Communists"; they now insist that the loose structure of a "monocolore" administra- tion would make it doubly vulnerable to Commu- nist influence. The Socialists and the other parties are play- ing down the Communist issue, and Moro would like to put the matter on ice for the time being. He wants to first nail down an agreement on economic policy; the parties are close to a com- promise on bread-and-butter issues. Moro would just as soon dump the Social Democrats if they remain adamant in the face of agreement among the other parties on economic policy. The key question is whether he can persuade the rest of his party to take such a step. Although Social Democratic support is not needed for a majority, the Christian Democrats have kept them in the cabinet to dilute Socialist influence. Dropping the Social Democrats from the parliamentary majority of a caretaker government could establish a precedent for excluding them from the next center-left coalition-a move that would inevitably strengthen the influence of the Socialists and give the coalition a more leftist complexion. Moro appears to have qualified support from Christian Democratic boss Fanfani, and this could tip the balance against the Social Democrats. There is still resistance to the idea, however, in the party's key center faction and among right- wing Christian Democrats. All of this means that the Christian Dem- ocrats may have to choose the lesser of two evils. If they jettison the Social Democrats, they eventually will have to yield more of the perquisites of power to the Socialists. If, instead, they side with the Social Democrats against the Socialists, they will not be able to muster a center-left majority. At that point, the only thing standing between the Christian Democrats and new elections-in which they would probably lose votes-would be a right-leaning coalition including the small, conservative Liberal Party. Although it is a numerical possibility, such a coalition could not govern effectively or for long against the opposition of the Socialists, Communists, and labor unions. The Communists are lying low. They have little to lose no matter what the Christian Democrats decide. The Communists prefer to avoid an electoral battle now, but if it came they would probably do well. On the other hand, if the Social Democrats end up in the opposition, the number of anti-Communist voices in the iov- SECRET Page 10 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 1400.1 0 EI..1 I"IE I ts' The 57th anniversary of the Bolshevik Rev- olution last week brought forth the traditional speeches and ceremonies, and few surprises. For- eign Minister Gromyko-representing the Polit- buro-delivered the major address on November 6. He concentrated on a routine cataloguing of Soviet foreign policy accomplishments and posi- tions, replete with flattering references to Brezh- nev. His moderately optimistic remarks included a statement that the USSR favors agreement with the US on halting the quantitative and qualitative arms races. He said the Soviets will strive to make the Vladivostok summit a meeting of great impor- tance to the continued improvement of US-Soviet relations. Gromyko called again for an early conclu- sion to the European Security Conference, imply- ing that a successful outcome in Geneva is a prerequisite to progress at the Vienna force reduc- tion negotiations. He was particularly pleased with the state of Soviet relations with France, West Germany, Finland, and India among the non-Communist nations and exhorted Japan to match Soviet overtures of good will. Turning to the Middle East, he reaffirmed Soviet support for Palestinian statehood and pre- dicted that Brezhnev's visit to Egypt in January would be of "tremendous significance." Gromyko reiterated earlier Soviet accusa- tions that China's leaders have aligned themselves with the enemies of detente and against the So- viet Union and the socialist community. His tough statement provoked a walkout by the Chi- nese ambassador, a ritual occurrence in recent years. Gromyko's speech preceded by four hours a Chinese broadcast of greetings to the Soviet government, a message containing an unexpected proposal for dealing with the Sino-Soviet border dispute. On November 7, Defense Minister Grechko made a brief speech in Red Square prior to the traditional parade. He acknowledged the reduced threat of nuclear war, but pledged to defend the gains of socialism against the "forces of interna- tional reaction" which, he said, have not laid down their arms. He expressed satisfaction with the Soviet armed forces and assured his listeners that the Soviet party and government are paying urgent attention to strengthening the country's defenses. Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 SI UKL I The military parade included no new weap- ons systems. The civilian portion was canceled, apparently at the last moment, with inclement weather given as the reason. This unusual step may have been taken to guard the health of aging Politburo members, most of whom were review- ing the proceedings from atop Lenin's tomb. Early this week the Soviets suffered another failure in their program for obtaining soil samples from the moon. The Luna 23 spacecraft- launched from Tyuratam on October 28-was damaged nine days later while landing on the moon in rough terrain, according to a Tass state- ment. As a result, the drilling device designed to collect the samples failed to operate. The drill, a modification of earlier designs, was intended to collect lunar rock from a depth of as much as nine feet-considerably deeper than past missions. The Soviets continue to have difficulty land- ing spacecraft of this sort on the moon. Of the five soil-sampling spacecraft that have reached the moon, only two-Luna 16 in September 1970 and Luna 20 in February 1972-landed intact col- lected samples, and returned to earth. The failure of Luna 23 is but one of many in the Soviet lunar space program. Of the 51 moon- related space probes launched since the fall of 1958, only 19 have been successful. Soviet per- formance has been improving in recent years, however. Seven of the nine lunar spacecraft launched since October 1970 have performed well. These successes include the two soil col- lection missions, one circumlunar and two orbit- ing missions, and exploration by two Lunokhod rover vehicles. The Soviets appear to be ex- panding the scope of their Lunar program, which is expected to continue at least through the end of the decade. A manned lunar landing by the Soviets may still be planned. but is unlikely be- fore 1980. The government personnel shifts announced on October 31 reflect Sofia's continued concern over ideology and the economy. The changes seem to have been designed to give the Bulgarian Council of State new responsibilities in these two areas. Two deputy premiers-Ivan Popov and Petur Tanchev-were transferred to vice presidential slots on the State Council. Popov, a noted scien- tist who advocates greater use of Western tech- nology to modernize the economy, is a trusted adviser of Zhivkov, who is also the council's chair- man. Tanchev was deputy premier for agriculture, and he may retain this responsibility on the coun- cil. He is also the working head of the Agrarian Union, the so-called opposition party, and his transfer may be intended to give substance to the contention that the council is, in fact, the "cor- porate head of state" it was designed to be when created in 1971. Among the other changes, Mitko Grigorov, the party's former ultraconservative ideologue, was promoted from member to vice president of the council, and Evgeni Mateev, a talented econo- mist, was made a member. Neither man has been among Zhivkov's friends, and their promotions will probably lead to speculation that the move was a concession to a faction within the party leadership. It is more likely, however, that their assignments were part of the effort to strengthen the council rather than the result of political infighting. In any case, none of the changes af- fects the balance in the top party leadership. The new appointments also preserve the balance of the Council of State's membership, which from the outset has embraced representa- tives of all sectors of Bulgarian society. In addi- tion to its protocol and ceremonial duties, the council will probably now become more deeply involved in the day-to-day running of the coun- try. It may take some of the burden off the Council of Ministers for supervising local and 25X1 district administrations. Up until now, the Coun- cil of State and Council of Ministers have shared this responsibility. SECRET Page 12 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 WHITHER THE OAS? The practical and political consequences of this week's OAS vote on the proposal to rescind the sanctions against Cuba, which fell two short of the needed two-thirds majority, will be a mixed bag. The final tally-12 for, 3 against, and 6 abstentions--provides certain domestic satisfac- tions for all the delegates. The 12, which either already have diplomatic relations with Havana or want that option open, now feel that their obliga- tion to respect the sanctions has been wiped out by the recorded opposition of a clear majority of the OAS members. The three voting against the proposal took home a major and unexpected diplomatic coup, since it had been widely assumed that the sanctions would be rescinded. The six have offended no particular portion of their constituencies. The outcome, however, deals a hard blow to the OAS, which was already considered by many a weak and unresponsive organization. It is too early to measure the damage to the dialogue established this year between the US and Latin America, but many governments are making no Page 13 secret of their unhappiness with the neutral posi- tion of the US throughout the Quito conference. Various delegates left with a particular sense of defeat or concern. Costa Rica's foreign minis- ter, one of the sponsors of the aborted resolution, suffers the special embarrassment of having given personal assurances that he had the required two- thirds majority wrapped up. The Ecuadoreans, as hosts, will be chagrined that "Quito" stands, in many minds in the hemisphere, for an inter- American debacle. The Argentines, who are set to host the next scheduled foreign ministers' meet- ing next March, are probably particularly unnerved. They were given the task of polling the Latin and Caribbean governments on whether Cuba should be invited to the Buenos Aires meeting. Fidel Castro was sitting pretty no matter what the result of Quito. He could have played a vote to lift the sanctions as a vindication of Cuba. But he is probably even more pleased to have the sanctions juridically in effect but flouted in SECRET Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 practice. Several Latin American governments have announced their intention to establish rela- tions with Havana, as seven OAS members already have done. Castro has made clear his preference that such ties be made in violation of OAS rules. He remains unalterably opposed to the organiza- tion and would like to be able to take credit for BOLIVIA: ELECTIONS CANCELED President Banzer has temporarily strength- ened his position by using last week's abortive coup attempt as justification for banning political activities and canceling the national elections set for next June. Even before the small insurrection occurred in an outlying province, however, Banzer reportedly had the consent of his military commanders to call off the elections. Last Thursday, Banzer quickly put down a rebellion by a few dissident politicians and an army infantry unit in the provincial capital of Santa Cruz, located approximately 350 miles southeast of La Paz. The fact that Banzer per- sonally commanded reinforcements in restoring order indicated that he had full confidence in his senior military advisers who remained in the capital. SOVIET SHIPS LEAVE CUBA The small Soviet naval group that had been in the Caribbean during the past eight weeks left Cuba on November 10. The ships- two Kresta-class guided-missile cruisers and an oiler---are now southeast of Bermuda and will probably cruise the western Mediterranean for a short time before returning home to North- ern Fleet waters. During the Cuban stay-the 12th such visit since 1969-the Soviet ships made visits to Havana and Cienfuegos. Unlike other re- cent visits, there was only a minimum of joint activity with the Cuban navy, probably because no Soviet submarines were included Banzer then announced that elections would be postponed until at least 1980. In his speech he sought to emulate other military strong men in South America by stating that the government intends to fulfill its mission of national recon- struction. Although development policies have consisted largely of empty promises and rhetor- ical flourishes, this stance makes Banzer look good when compared with his disorganized and inept opponents. Banzer has taken other measures to stabilize his government. Official charges of subversion against two cabinet ministers, who had been in- volved in previous moves against the President, have resulted in a minor cabinet reshuffle. Military support has rallied behind the gov- ernment for the time being, but Banzer now de- pends solely upon the good will of his generals for his political survival. They have previously told him that he must soon step down in favor of an acceptable military replacement. The current front-runner is General Juan Lechin, the second highest official in the government. If Banzer balks at stepping down, the members of the high com- 25X1 mand will probably abandon their current efforts at achieving an orderly transfer of power and in the latest group. In the past, the surface ships usually were accompanied by a sub- marine, which acted as a target for Cuban patrol boat training. Although two sub- marines were observed trailing the Krestas across the Atlantic en route to Cuba, the Soviets apparently changed sailing orders as the submarines neared the Caribbean, and the two units returned to home waters. No fur- ther information has become available regard- ing this change in plan. If the Soviets follow the pattern of the past two years, another naval task group will visit Cuba next spring. SECRET Page 14 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 China-USSR PEKING PROPOSES NONAGGRESSION PACT Last week Peking surfaced a proposal for dealing with the Sino-Soviet border dispute. The proposal, contained in a message to the Soviets on the occasion of the anniversary of their October Revolution, called for a pact renouncing aggres- sion and the use of force, a mutual troop pullback from disputed border areas, measures to avert conflicts, and maintenance of the status quo of the border itself. The Chinese had made a similar proposal in private during the early rounds of border talks in 1969, but had never before publicly urged a non- aggression pact. Peking had greeted earlier and well-publicized Soviet calls for such a pact with public silence and private contempt. The Chinese have consistently argued that any nonaggression and nonuse-of-force pact would have to be ac- companied by a withdrawal of Soviet forces from the frontier, a position that the Soviets have categorically rejected. Because this linkage re- mains in the new Chinese proposal, Peking almost certainly expected that Moscow would find the package unacceptable. There were other indications that the pro- posal was a tactical maneuver. Chinese diplomats were quick to scotch speculation that the package signaled an upturn in Sino-Soviet relations, point- ing out to American and Japanese diplomats that the proposal contained nothing new. The message still has not been replayed by the New China News Agency nor has it been broadcast inside China, something Peking would almost certainly do in case of a major new development in Sino- Soviet relations. The substance and tone of Chinese and Soviet propaganda directed at one another, moreover, have not changed in any way since the proposal was made. Moscow maintained official silence on the substance of the package and has withheld publi- cation of Chinese terms for agreement. Soviet spokesmen have privately claimed that Peking has not offered anything new and that border talks can resume whenever Peking presents a fresh proposal. The Soviets are probably reluctant to make any authoritative response until they can determine whether Peking intended anything Soviet border guards along the Ussuri River more in publicizing its proposal than to gain some propaganda advantage. In their message to the Chinese on PRC National Day, the Soviets included references to their own proposals for lowering Sino-Soviet ten- sions. The Chinese, not to be outdone in this display of flexibility, have replied in kind. In a clear public relations gesture, moreover, the Chinese embassy in Moscow took special pains to distribute the full text of the proposal to foreign embassies and news services there after the Soviets had published it only in censored form. The Chinese may hope to enhance their leverage both with the US and USSR by con- veying an impression of a more forthcoming attitude regarding the Sino-Soviet dispute and by implying that China is less concerned about the Soviet threat than it was a few years ago. By appearing accommodating, Peking also probably hopes to create a favorable impression among foreign Communist parties and complicate Soviet efforts to organize an international Communist SECRET Page 15 WEEKLY SUMMARY Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 JCVNf Saigon last week called on the Communists to resume political and military discussions with- out preconditions. The South Vietnamese initia- tive was, in effect, the government's response to a Viet Cong statement on October 8 that called for the removal of President Thieu as a precondition for resuming negotiations and implementing the Paris Agreement. The Communists quickly re- jected Saigon's initiative, characterizing it as a "deceptive move" designed to confuse public opinion. Viet Cong officials in Saigon and Paris repeated their demands of October 8 and main- tained that there would be no new talks as long as Thieu remains in office. Hanoi's party journals quickly publicized the Viet Cong rejection. Political talks between the two sides were suspended by the South Vietnamese in April fol- lowing the North Vietnamese capture of a ranger outpost north of Saigon. At that time, the govern- ment sharply curtailed the privileges of the Viet Cong and North Vietnamese military delegations in Saigon, which in turn led to a Communist walkout from the Saigon military talks. These discussions were resumed by the two sides in June, following the government's restoration of privileges to the Communist delegations, but they were quickly broken off again by the Com- munists. erally moderate to low level of action continues throughout most of the rest of the country. The usual Communist midmonth mini-highpoint in the delta went off, but the action was spotty and concentrated in several areas. In Vinh Long Prov- ince--one of the hardest hit areas--at least ten government outposts were lost and several roads interdicted, necessitating the movement of troops of the 7th Division into the province for the first time in several months. Deteriorating weather conditions and heavy casualties on both sides have somewhat slowed the ongoing battles for a number of strategic high-ground positions in the northern provinces. Several of these positions have been retaken by government forces, but the South Vietnamese 1st Division has been unable to make significant progress against Communist forces dug in just south of Hue. The regional commander is con- templating moving in fresh combat units to help out, because he considers these positions vital to the defense of the lowlands south of the city. The current lull in fighting in the central provinces can best be described as an intermission for the opposing forces while the monsoon moves to the coast and the highlands begin to dry out. The latest South Vietnamese move meshes neatly with other recent actions of President Thieu designed to answer the charges of his polit- ical opposition. By placing the onus for the pres- ent lack of movement on negotiations squarely on Hanoi, Thieu no doubt hopes to undermine the efforts of Buddhist dissidents to exploit public frustration over the continuing hostilities and the ineffectiveness of the Paris Agreement. Neither Buddhist nor Catholic opposition leaders have as yet reacted to Saigon's call for the resumption of negotiations. Opposition activity continued at a low level during the week with protests con- fined to rallies and meetings in pagodas and churches. Communist: military activity picked up early ~n the week in the delta provinces, but the gen- The South Vietnamese thus far have been successful in blunting Communist efforts to establish a commanding high-ground position overlooking the North Vietnamese supply route in the An Lao Valley of Binh Dinh Province. There has been an increase in Communist harassment and interdiction of key roads, especially the lateral routes from the lowlands to the highlands and north-south Route 1. The military scene also remains reasonably quiet in the provinces around Saigon with the Communists continuing their terrorist and sapper attacks. Most of the Communist main-force combat units are being refurbished for dry-season action while COSVN is restructuring and stream- lining its command and control structure. I 25X1 SECRET Page 16 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 J L_ %_# I IL_ I *fto 1*0010, A statement by Chairman Mao Tse-tung-in a recently issued central directive-that the Cul- tural Revolution has gone on long enough under- scores the focus on political unity that typifies Peking's current propaganda line. Mao adds that the time is ripe for convening the National People's Congress, China's rubber-stamp parlia- ment; in fact, preparations for the congress are well under way. A corollary to the damping down of political struggle has been an emphasis on production, and both themes have been forcefully expressed in a series of central directives going back to July. As a whole, these developments show that moderate elements retain the upper hand in Peking. The political and policy trend since last sum- mer has been displeasing to Mao's left-leaning wife, Chiang Ching. Arrangements for the suc- cession to the party chairmanship have apparently been completed. Despite Chiang Ching's most recent attempts to portray herself as Mao's suc- cessor--expressed in the form of media articles on an historical empress who ruled China after the death of her husband-youthful party vice- chairman Wang Hung-wen appears to be the one designated. Moreover, two of Chiang Ching's Cul- tural Revolution opponents seem to have the suc- cession to the premiership locked up between them. The madame has not made much headway with her ambitions. In fact, she may have slipped a little. A Chiang Ching was e in a move to put inese women in skirts, but surprisingly went on to criticize the idea as not necessary and not good for China. But most sig- nificant has been Madame Mao's obvious inability to take advantage of Chou En-lai's serious health problems. Chiang can still hurl propaganda barbs and make her weight felt in the cultural sphere, but she and her ultraleftist supporters appear to have been outmaneuvered, at least for the present. The rehabilitation of officials purged during the Cultural Revolution continues, and a reported central directive ordering the abolition of revolu- tionary committees, if carried out, seems sure to offend leftist sensitivities. Established in 1967, the committees still symbolize leftist Cultural Revolution ideals and have been the object of a political tug of war for some time. An earlier move to replace these committees with people's coun- cils, the pre - Cultural Revolution organs of gov- ernment control, was allowed to lapse after the campaign to criticize Lin and Confucius began in August 1973. While the anti-Lin, anti-Confucius campaign is now apparently being phased out, factional differences, although they may be muted, will not disappear. A period of relative calm will probably ensue and improvements in production and social order in several provinces may well result, but the political contestants will keep their hatchets close at hand. In particular, Chiang Ching and her left- ist allies will remain vigilant for an opening, and 25X1 current succession arrangements, no matter how clearly defined, will be tested when the time comes for them to be put into effect. Posters criticizing Lin Piao and Confucius SECRET Page 17 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 JCL.RC I President Ford will be visiting Japan next week at a rather turbulent time. A controversy over the alleged presence of US nuclear weapons in Japan has generated some opposition to the President's visit. Moreover, Prime Minister Tanaka is in the midst of a political crisis stemming from charges of financial corruption. These issues, along with continuing high in- flation, will be the subject of demonstrations and strikes while the President is in Japan. But there are mitigating factors: scheduled for days when the President will not be in the city. Socialist leaders are now saying that they do not intend to harm good relations be- tween the US and Japan, but are opposing the visit solely out of fear that it will lead to a stronger military alliance between the two coun- tries. Opinion polls, meanwhile, show a majority favoring the visit, and Japan's major news dailies weighed in late last week with supporting editori- als. In short, a consensus is developing that a courteous reception is in order, and a massive security effort by the Japanese police should con- tain any attempts by radical youth groups to cause problems. ? Protest activities will be orderly and will cause a minimum of disruption. ? Most Japanese political groups, the press, and a large majority of the public wel- come the President's visit. A Besieged Tanaka ? Although Tanaka may well resign before the end of the year, he and his rivals within the ruling Liberal Democratic Party have de- clared a truce until the President's visit is over. The Current Atmosphere During November, a more favorable atmo- sphere for the President's visit has been develop- ing, and opposition groups have trimmed their scheduled activities accordingly. Last week, one opposition party withdrew from further demon- strations against the President, and others have yet to agree on a unified effort. The major groups still opposing the visit-the Communists, Socialists, and the largest labor fed- eration-are committed to holding demonstra- tions, but they are emphasizing their nonviolent character. The themes they will stress, moreover, focus more on inflation and Tanaka rather than on the US and the President's visit. In an effort to avoid a sense of confronta- tion over the trip, the major rallies in Tokyo are At present there is no clear successor to Tanaka. Despite his many ups and downs and his SECRET Page 18 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 % D Nftwlf Iw Prime Minister Tanaka flanked by Finance Minister Ohira (r) and Trade and Industry Minister Nakasone sagging popularity, he retains considerable power in the party, and carrying out an orderly transfer of such authority can be a difficult and time- consuming process under the best of circum- stances. Tanaka and his rivals within the party have clearly agreed to hold their differences in abey- ance during President Ford's tour. But thereafter Tanaka will find it exceedingly difficult to stabi- lize his position and retain the prime ministership for long. 25X1 Page 19 SECRET WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 6L(;KF- I South Korea's economy is in its first pro- nounced slump in over a decade. Although real growth in 1974 will amount to 8 to 10 percent, most of the gain came during the first six months. The growth will continue slow well into 1975. Although the long-term outlook remains bright, near-term prospects have dimmed because of the continued economic downturn projected for major Western industrial nations that take the bulk of Korean exports. In the past, brisk foreign sales have been the basis of Korea's rapid eco- nomic growth. Industrial output through June was more than 25 percent above last year's average, but has dropped since then. The downturn has been limited so far to a few consumer-oriented export industries. Hardest hit are the labor-intensive textile, clothing, plywood, and electronics in- dustries. Heavy industry, in contrast, continues to do relatively well. Unemployment, although not yet serious, is rising. Some 100,000 workers have been laid off so far this year, a cut of some 6 percent of the manufacturing work force. The unemployment burden has thus far been borne mainly by young women rather than male heads of households. Korea Exchange Bank in Seoul Nevertheless, labor unrest in the cities is growing as inflation cuts deeper into real income, and unemployment threatens to increase. In response, the government is encouraging businesses to re- duce work hours rather than cut payrolls, and will back generous pay hikes even at the risk of aggra- vating inflationary pressures next year. Labor is pushing for hefty wage increases as pay boosts this year have generally not kept pace with the rising cost of living-consumer prices have already risen 25 percent this year despite subsidized food prices. Seoul has also shifted from curbing inflation to bolstering output and employment. This year's budget, which showed a surplus through Septem- ber, is now in deficit, and next year's budget provides for substantially greater spending on de- fense, industrial projects, public works, and wel- fare. Seoul is also extending loans to financially pressed small- and medium-sized firms to help avoid a rash of bankruptcies and is offering loans to hard-hit larger firms in labor-intensive indus- tries to help them maintain employment levels. Sluggish export growth and soaring import costs-the oil import bill has tripled this year to around $1 billion-has sharply increased the trade deficit. As a result, the current payments deficit will reach some $1.5 billion, or five times last year's deficit. With direct foreign investments sharply off last year's pace, Korea has stepped up its foreign borrowing, especially short-term cred- its. Korea's good international credit rating and relatively low debt service burden have enabled it to meet its financing needs. For next year, Seoul hopes to reduce short- term borrowing by obtaining more long-term cap- ital, although this may prove difficult. As a pre- caution, besides borrowing from its usual lenders, Seoul is seeking increased credits from the Inter- national Monetary Fund and Middle East oil pro- ducers. Seoul has attracted a $20-million loan from Abu Dhabi thus far. Direct foreign invest- ments are likely to pick up next year, however, as several leading US and Japanese firms are going ahead with investment clans involving over $800 SECRET Page 20 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 `wl SECRET _WXF OPEC countries will earn more than $105 billion and actually receive about $94 billion from oil exports in 1974. The difference results from an average two-month lag in payments by oil companies to the producing countries. The bulk of 1974 OPEC oil receipts will be concen- trated in the last half of this year-$60 billion, compared with $34 billion in the first half. Second half receipts will reflect all of the January and most of the July price increases and are inflated by an additional $10 billion in retroactive payments resulting from nationalization moves. The bulk of OPEC oil receipts in 1974 will go to relatively few countries. The two largest producers, Saudi Arabia and Iran, will receive about $43 billion, over two thirds in the second half of the year. Together, the five largest pro- ducers-Saudi Arabia, Iran, Nigeria, Venezuela, and Kuwait-will account for over 70 percent of total OPEC revenue this year. OPEC oil receipts should decline when the retroactive payments are completed early next year. Any further price increases will be partly offset by decreased demand. If present pro- duction and prices are maintained, oil payments in the first quarter of 1975 would total $26.9 billion-almost $4 billion below the level of receipts in the third and fourth quarters of 1974. Even if currently anticipated price hikes are in- stituted, payments will still drop by about $2 billion for the first quarter of 1975. Estimated OPEC Oil Receipts by Country, 1974 (In million US $) Algeria 1668 2061 3729 Ecuador 355 197 552 Indonesia 1111 1835 2946 Iran 6963 11196 18159 Iraq 2173 2904 5077 Kuwait 1215 6162 7377 Libya 3459 3226 6685 Nigeria 3063 5563 8626 Qatar 610 915 1525 Saudi Arabia 7446 17159 24605 United Arab Emirates 1829 4720 6549 Venezuela 4207 4263 8470 EDITOR'S NOTE: On page 3 of the Special Report, Detente and the Stirring of Soviet Dissidence, No. 0046/74A, November 15, 1974, the final sentence of the second paragraph should read: "Some, at least, go further and consider these freedoms the core of a general civil rights guarantee for all Soviet citizens." SECRET Paae 21 WEEKLY SUMMARY Nov 15, 74 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6 Secret Secret Approved For Release 2008/07/15: CIA-RDP79-00927A010900160001-6