WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A011000100001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 21, 2016
• Document Release Date: November 20, 2007
• Sequence Number: 1
• Publication Date: March 7, 1975
• Content Type: SUMMARY

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Secret
Weekly Summary
State Dept. review completed
Secret
No. 0010/75
March 7, 1975
N2 70
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The WEEKLY SUMMARY, Issued every Friday morning by the
Office of Current intelligence, reports and analyzes significant
developments of the week through noon on Thursday. It fre-
quently Includes material coordinated with or prepared by the
Office of Economic Research, the Office of Strategic
Research, the Office of Geographic and Cartographic
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
4 Cambodia: Life Line Threatened
4 Indochina: New Soviet Interest
5 Vietnam: Fighting Increases
6 Australia: Election Nerves
7 China: The New Campaign
11 Soviet Cultural Scene Simmers
12 Italy: Party Youth Defy Fanfani
13 Portugal: Cautious Optimism
14 Turkey: Political Woes Continue
15 Ethiopia: Land Reform Announced
16 Rhodesia: New Roadblock
17 Violence in Lebanon
17 Iran: Dropping a Facade
18 India and the Big Powers
20 Latin America: Reactions
to Kissinger Speech
21 Cuban Economy on the Upswing
22 Peru: Politics of Succession
23 Argentina: Terrorists
Target US Citizens
CONTENTS (March 7, 1975)
EAST ASIA
PACIFIC
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
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 t 4y -o wi~
The political and military actions of Israel
and the Arab front-line states during the past
week suggest that they hope and expect further
steps toward peace from Secretary Kissinger's
current visit to the Middle East. In spite of this
optimism, there has been.no relaxation of mili-
tary tensions. Egypt, presumably to underscore
the need for early progress in negotiations and
to prepare for the possibility of renewed hostili-
ties in the future, is continuing efforts to aug-
ment and consolidate its military dispositions
along the Suez Canal. The Israelis have reacted
to this activity only with public expressions of
concern.
In the brief period since Secretary Kis-
singer's last trip to the area, Egyptian media
have spoken daily-and with considerable opti-
mism-of the prospects for concluding another
disengagement agreement during the Secretary's
current visit. President Sadat drew attention to
one area of flexibility by suggesting, albeit
obliquely, that the US can serve as a guarantor
of Egypt's pledge to refrain from war so long as
negotiations remain alive. Sadat also demon-
strated his commitment to the negotiating pro-
cess and his expectation that the results will
justify the risks he is taking by publicly defend-
ing Egypt's right to continue disengagement
talks against vigorous criticism from the Pales-
tinians.
To reassure the other Arabs, Sadat has
claimed that he will not grant any political con-
cessions to gain a further Israeli withdrawal. In
the same vein, Egyptian press commentators and
government officials have stressed that another
Egyptian-Israeli agreement will not end Egypt's
obligations to the other Arabs.
The Syrians, aware of Cairo's pivotal role
in negotiations, have tried to keep the pressure
on Sadat in hopes of preventing him from con-
cluding an agreement with Israel that does not
in some way take into account Syrian and Pales-
tinian interests. At the same time, Syrian For-
eign Ministry officials are privately holding to
the positive note struck by President Asad when
he said in an interview published last week that
Damascus is ready, if and when the terms are
right, to sign a formal peace treaty with Israel.
The Syrians probably hope this will encourage
Israeli leaders to consider a further withdrawal
on the Golan Heights as soon as the next Sinai
accord is reached. For bargaining purposes, at
least, Asad is still demanding a uniform Israeli
withdrawal along the length of the current dis-
engagement line; he continues to reject the idea
of a more limited pullback south of al-
Qunaytirah.
Israeli Prime Minister Rabin, meanwhile,
has formed a study group at the sub-cabinet
level to consider options and to draft working
papers covering a second-stage Israeli-Egyptian
agreement. The five-man group reportedly is
focusing on options for a broad agreement that
would involve an Israeli pullback from the Gidi
and Mitla passes and the Abu Rudays oil fields.
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vwnc I
Rabin faces considerable opposition to any
such agreement within his government and
among the public. Defense Minister Peres has
said that a straightforward Egyptian undertaking
to abandon war against Israel will be necessary
before Tel Aviv can satisfy Cairo's demand for a
pullback from the passes and the oil fields. The
rightist Likud bloc, with wide public support, is
planning a demonstration in Tel Aviv on March
8 to protest any concessions by Israel that are
not accompanied by a formal peace agreement.
Egyptian-Palestinian Dispute
Leaders of the Palestine Liberation Organi-
zation were thrown off balance by Sadat's un-
characteristically strong reaction to their policy
statement of February 26, which condemned
step-by-step negotiations. They have been mov-
ing cautiously this week to repair the damage to
Palestinian-Egyptian relations. The Palestinians
are still leery of another agreement between
Egypt and Israel, however, and are continuing
quiet efforts to marshal Arab support for their
position. PLO delegations are visiting eight Arab
capitals.
A PLO spokesman said on March 3 that
Faruq Qaddumi, head of the PLO political
department, will lead a delegation to Cairo in
the "near future" to meet with Egyptian For-
eign Minister Fahmi. The group can be expected
to minimize the importance of the offending
PLO statement and to argue that the Pales-
tinians were condemning the US rather than
Egypt. Palestinian broadcasts from Cairo have
already attempted to explain that the PLO was
not attacking Egypt, and have claimed that both
sides have agreed to "contain the crisis for the
sake of Arab unity." A number of second-level
Palestinian leaders have spoken candidly in pub-
lic of the need for a return to normal relations
with Egypt.
President Sadat will be meeting with Secre-
tary Kissinger in Aswan when the Palestinians
are expected to arrive in Cairo, and he will
probably not meet personally with the delega-
tion. Sadat has given no sign that he has backed
down from his demands that the PLO either
Page
T(TIE
_1P ON 1 -
n the night. of Match 5, members of
'LO leader basin- Arrafat's Fatah group,
com ngvfroml the sea mounted a spectacular
raid , on, . Tel Aviv, Israel's largest city. At
.least 13 persons were killed in the incident,
'ricluclin, according to press reports, seven
oft eight fedayeen. In talk with news
tie r sMarch,6, the leader of Fatah's ter
rnrist Black September Organization linked
the operation = with, Secretary Kissinger's
visit to_ the.. Middle East. He indicated that
the Palestinians' purpose was to empha-
size that peace in the area is unattainable
without their participation.
s. the raid should have no adverse effect
On Israeli-Egyptian negotiations. Official
statements issued by both parties empha-
sized that efforts to reachs peaceful solu-
tion roust continue, The,.i_ncident will,how-
ver, reinforce Tel Aviv's-determination to
e - - , the PLO ,from any peace negotia
lions;, More immediately,, the Rabin govern-
ment will be- under strong pressure to strike
again&st ` Palestinian bases.
withdraw its policy statement or send the entire
PLO executive committee to Egypt to iron out
Egyptian-Palestinian differences. The Qaddumi
visit, however, will probably lead to a reduction
of tensions and clear the way for a subsequent
meeting between Sadat and PLO chairman Yasir
Arafat.
Arafat has so far avoided public comment
on the contretemps with Egypt. He presumably
believes that Palestinian dignity requires him to
avoid a public apology, and that he must protect
his own position by denying his more radical
colleagues the opportunity to brand him a col-
laborator in Sadat's dealings with the US. Arafat
may also believe that the current hue and cry
puts pressure on Sadat to keep Palestinian in-
terests in mind during the present round of
negotiations. Although Arafat is suspicious of
the step-by-step tactics employed by Sadat, he
still hopes the Egyptians can come up with
something concrete for the Palestinians.
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Rabin
Should the Egyptian efforts ultimately pro-
duce nothing, or if the Palestinians are excluded
from the negotiating process, Arafat would
probably speak out forcefully against any agree-
ment with Israel and endorse an increase in
fedayeen terrorism. The PLO leader may already
have this option in mind.
Page
Moscow Makes the Best of It 5_ 7
J
The Soviets are now saying privately that
they will not oppose a new Egyptian-Israeli dis-
engagement agreement and are even claiming
that they are actively working to abet the peace
negotiations. Moscow's public statements show
that it still resents US domination of the nego-
tiations, but it has apparently concluded that it
cannot block the present process and that it is
better for the Kremlin to cast its lot with the
discussions-and claim some role for their suc-
cess-than to remain on the sidelines.
Moscow probably calculates that if a new
Sinai disengagement is worked out, the next
step in the negotiating process would have to
involve Syria. The Soviets probably believe that
the Syrians will be much more likely than the
Egyptians to bring them into the negotiating
process and may think that the US will be
interested in having Moscow use its influence in
Damascus on behalf of a settlement. At a
minimum, Brezhnev and his regime will be
better able to save face from what has been a
protracted bad period for the Soviets in the
Middle East. The durability of the present So-
viet position, of course, will depend on progress
in the talks and the role Moscow is, in fact,
allowed to play.
losses.
ever, will not compensate for Egypt's 1973 war
Meanwhile, the Soviets are taking some
steps to keep their relations with Cairo-which
are fraught with suspicion and recriminations-
from deteriorating any further. Last month,
they resumed shipments of fighter aircraft to
Egypt-the first deliveries since 1973. About ten
MIG-23s and at least four SU-20 Fitter-C
fighter/bombers arrived in Alexandria in Febru-
ary, but because the contracts for these aircraft
were signed prior to the 1973 war, the deliveries
do not satisfy President Sadat's demands for a
new arms agreement. Since last August, Moscow
has also been delivering spare parts, ammuni-
tion, and ground support equipment to Egypt.
Actual and anticipated Soviet deliveries, how-
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CAMBODIA: LIFE LINE THREATENED
_I-I)--
(Phnom Penh's worst fears were realized
this week as the Khmer Communists began artil-
lery attacks against Pochentong airport, briefly
halting the vital US airlift. The shellings fol-
lowed the Communists' capture of the town of
Toul Leap, which allowed them to move cap-
tured 105-mm. howitzers within seven miles of
the airport. At week's end, government forces
launched an all-out effort to retake Toul Leap
before the insurgent artillery ends the US airlift
and forecloses Phnom Penh's last hope for con-
tinuing resupply.
With government attention focused west of
Phnom Penh, other Communist units have been
edging toward the capital from the northeast.
Government troops have lost four riverside posi-
tions in this area, and insurgent mortar and
recoilless-rifle crews are now within range of the
main navy headquarters. Rockets fired from the
Mekong River's east bank and from elsewhere
around the capital continue to take a toll of
civilian lives.
Communist attacks against government
holdings farther south along the Mekong are also
continuing without letup. Navy convoys from
Phnom Penh are still getting through to the
beleaguered enclave at Neak Luong and the re-
maining beachheads on the lower reaches of the
river, but at considerable cost: two landing craft
and a patrol boat were lost this week. The
navy's Mekong flotilla has been reduced by half
since the beginning of the year, and military
leaders have now postponed indefinitely any
further efforts to reopen the river in order to
conserve resources for the defenses of Phnom
Penh.
More Arms from Hanoi
In a press interview last week, Prince Siha-
nouk claimed that Hanoi had agreed to increase
its arms deliveries to the insurgents in response
to the US airlift to Phnom Penh. The prince
asserted that the agreement had been reached
while he was in Hanoi in mid-February. Pri-
vately, Sihanouk elaborated by saying that
North Vietnamese Premier Pham Van Dong and
Defense Minister Giap had agreed to facilitate
the transshipment of military equipment pro-
vided by China.
INDOCHINA: NEW SOVIET INTEREST
)
)The Soviets have s13, t (Deputy Foreign Min-
ister Firyubin on a hastily arranged trip to Indo-
china for a firsthand look at the situation.
Soviet army chief of staff Kulikov was also in
Hanoi in December, ostensibly for the celebra-
tion of the North Vietnamese army's anniver-
sary. Presumably, Kulikov sounded out the
North Vietnamese at that time regarding their
military intentions in South Vietnam during the
dry season. Firyubin almost certainly covered
this same ground, particularly in view of signs
that Hanoi is readying a new phase of its dry
season campaign in South Vietnam.
Cambodia-which did not loom so large in
December-was probably high on Firyubin's
agenda. In addition to getting a better apprecia-
tion of the situation, and of how Hanoi and the
Khmer Communists see it developing in the
coming weeks, Firyubin may have sought to
place Moscow in a position to exert some influ-
ence in the event of a complete Communist
victory in Cambodia.
Until recently, the Soviets were openly
stating that a military solution in Cambodia was
not possible and were urging negotiations. Now
they find themselves having diplomatic relations
with the Lon No[ government, weak ties with
the Khmer Communists, and little prospect of
working with Sihanouk, who is de endent on
Peking.
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VIETNAM: FIGHTING INCRESES
-
1 14, 17
I j:;
he surge in fighting in the centra high-
lands this week suggests that the North Viet-
namese spring campaign has started in that area.
Communist units attacked and overran several
outposts in Kontum and Pleiku provinces and
interdicted strategic Highway 19, which links
the highlands to the coast. Two of the govern-
ment's important air bases-at Pleiku and at Phu
Cat in Binh Dinh Province-were shelled.
Stepped-up attacks were also reported in the
northern provinces and north of Saigon, but
these could have been in response to a recent
increase in South Vietnamese military
operations.
The government's first task in the high-
lands will be to reopen Highway 19 between
Pleiku City and Qui Nhon. The Communists
have succeeded in destroying at least nine
bridges and culverts, and have overrun two fire
bases guarding important mountain passes; they
apparently plan to step up the pressure gradu-
ally against the two highland capitals-Pleiku
and Kontum-while keeping the highway cut. If
Route 19 stays closed for any significant period
of time, the government would be hard pressed
to airlift sufficient supplies to hold these two
capitals. Even with the highway open, the South
Vietnamese face a difficult situation in the high-
lands. Kontum City is especially vulnerable. It is
the last remaining stronghold in Kontum Prov-
ince and depends upon Highway 14 from Pleiku
City for resupply. The Communists can easily
cut this road, and it would be difficult for the
city's small airfield to handle the number of
flights needed to resupply the garrison by air.
The new fighting in the highlands has
th Vietnamese regional com-
S
d th
ou
e
cause
mander to defer earlier plans to shift govern- sion. The commander now believes that not
ment units. Originally, parts of a division were only will the government division be needed in
to be moved south from Pleiku to the Darlac- Pleiku and Kontum, but that additional units
Quang Duc province border area to offset the should be brought in frorr the coast.
suspected relocation of a North Vietnamese divi-
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AUSTRALIA: ELECTION NERVES
SEven though national elections are not def-
initely in the cards, the edginess of both the
Labor government and the opposition coalition
was clearly evident last week in a series of parlia-
mentary sessions that were exceptionally dis-
orderly even by Australian standards of hurly-
burly. During one prolonged uproar, the govern-
ment forced the resignation of its own speaker
of the House of Representatives. At one point in
the debate, Prime Minister Whitlam, who felt
the speaker had been ineffective in handling
opposition needling of a cabinet minister, be-
littled him within earshot of opposition mem-
bers. Another indication of Whitlam's recent
testiness over his government's precarious politi-
cal position has been his frequent petty denigra-
tion in public of opposition leader Billy
Snedderi.
During the parliamentary hassle over the
House speaker, some Laborites openly showed
dismay over what they considered the govern-
ment's undignified behavior. Three cabinet
members abstained on a government motion
that reflected adversely on the speaker's compe-
tence. This unusual public break in traditionally
tight party discipline could have ominous impli-
cations for Labor Party unity in the event of an
electoral campaign.
The government is also increasingly frus-
trated by its minority position in the upper
house. The Senate last week voted down eight
bills the administration regards as essential. This
gives the government legal grounds for dissolving
parliament and calling elections. Even though
the government's popularity has recovered
slightly from an all-time low, Labor is still not
anxious to go before the voters. Nor is the
Liberal-Country opposition, despite its pos-
turing, sure that it wants to take on responsibil-
ity at this time for economic problems that have
no easy solutions. The prospect is thus for con-
tinuing bluster but no immediate moves for
holding elec i
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The Chinese are not comfortable unless
they are conducting some sort of campaign. Last
year's anti-Confucius campaign was terminated
prematurely after it led to widespread public
disturbances. This year's exercise-a nationwide
campaign to study the "theory of the dictator-
ship of the proletariat"-seems in part to be an
effort to correct last year's excesses.
Peking has not made its goals in this study
campaign entirely clear yet. Stricter enforce-
ment of party directives, especially as they re-
late to the troubled economy, certainly seems to
be one of its purposes, but the door has been
left open for possible new attacks on provincial
or national leaders as well.
The campaign was officially launched on
February 9th with an editorial in People's Daily,
the party's official paper. This article and others
that followed called on everyone to study a new
"Mao quotation" on proletarian dictatorship.
Besides demanding stricter adherence to party
directives and an end to public disturbances, the
articles continue the strong attack on a number
of common economic practices the Chinese con-
sider bourgeois. Cadre who tolerate these prac-
tices are also criticized, but the tone is not
vindictive. One article, however, by Chou Ssu, a
pseudonym that suggests the views expounded
in the article may be close to those of Chou
En-lai, seems to warn cadre that they may be
purged if they persist in their errors.
The dominant themes of the campaign-
improving social order and production-are gen-
erally associated with positions held by the
more moderate elements in the national leader-
ship, and these elements appear to be behind the
current campaign. Production and transporta-
tion problems almost certainly played a part in
the curtailment of the anti-Confucius campaign
last summer.
One of the more intriguing aspects of the
new campaign is a theoretical statement by
Politburo member and leftist ideologue Yao
Wen-yuan published in the latest issue of the
journal Red Flag, which is obviously meant to
provide much of the ideological underpinning of
the campaign. Yao pays somewhat less attention
to economic issues than do most of the other
major articles and editorials associated with the
campaign, and elaborates on the new "Mao quo-
tation" by discussing at length the disparities in
wage scales and living standards built into the
Chinese political and economic system at the
"current stage of socialism."
In the opening phases of his argument, Yao
strongly implies that these disparities can be
exploited and intensified by secret enemies of
communism nestled within the Chinese Commu-
nist Party, thus suggesting that these anomalies
must be eliminated, but the final third of his
article strongly endorses the current emphasis
on unity and order. Yao's strictures against
"shrewd and crafty old bourgeois elements"
who stay behind the scenes manipulating im-
pressionable youngsters may well be a veiled
attack on those who attempted to use the anti-
Confucius campaign last spring to stir up trouble
in the provinces. If so, it could be an attempt on
Yao's part to disassociate himself from such
people. Although an apparently unreconstructed
leftist, Yao in both 1967 and 1968 attacked
"ultra-leftism"; the 1967 article was, in fact, the
first salvo in a movement that led three years
later to the purge of Chen Po-ta, a leading civil-
ian "leftist" associate of Yao's.
l.(0
The ambiguities contained in Yao's article
have been present in the current campaign since
it was first heralded at the National People's
Congress by Chang Chun-chiao, a vice premier
and Politburo standing committee member. The
question of disparities in the wage scale and
other aspects of China's economic system, for
example, remains very much open. The new
campaign could be used to reduce these dispari-
ties, but it could also be used to defend these
differences while China continues to develop
and modernize its economy. The latter course
was strongly suggested by the publication of a
series of selective quotations on "bourgeois
rights" from the works of Marx, Engels, and
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Lenin, which occupied three of the four pages
of a recent issue of People's Daily.
In this ambiguous situation, the position of
Mao himself is, as always, of great importance.
The new "quotation" could be interpreted as
either an attack on "bourgeois rights" or a de-
fense of them in the current Chinese context. In
his article, Yao makes pointed reference to the
practice of "waving the red flag to oppose the
red flag"-that is, the practice of distorting pol-
icy directives for factional political ends-an
emotionally charged catch-phrase that was
frequently employed during the Cultural Revo-
lution. It is not clear, however, if Yao was
referring to unnamed "enemies" who empha-
sized the wrong themes in the current campaign
or to those who attempted to exploit the fluid
political situation last year.
In the past several years, the Chairman's
concerns seemed to have centered on foreign
policy, particularly on ensuring continued
opposition to Moscow, and on ensuring that the
political power of the military was firmly
curbed. It is not yet clear whether his attention
has shifted to domestic matters in the aftermath
of the National People's Congress. In any event,
he has been away from Peking for eight months,
and he attended neither the congress nor the
central committee plenum that preceded it.
Moreover, in the past week he has failed to see
two foreign visitors who normally would be
accorded an audience. If Mao continues to
remain inactive, questions regarding his status
are bound to be raised in China, and officials are
already attempting to minimize this incipient
problem-without a rest deal of success thus
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,tier sauI"cro
In recent months, the re- of adventurous official art an a five-year suspended sentence
grime's more sophisticated and unusual prominence since mid- from a Leningrad court last
pragmatic approach to culture December. Several concerts of week. Similarly, Viktor Krasin,
and to dissident activities has avant-garde music were at- a once-prominent activist who
generated a budding-though tended by many prominent cul- has been shunned by his col-
still uneasy-optimism among tural figures. There was a jazz leagues since he recanted at his
intellectuals both in and out of tribute to Duke Ellington, and trial in 1973, reportedly has re-
the establishment. Many activ- even a noisy recital by a Soviet ceived an exit permit and will
ists are warning, however, that rock group. In painting, two of- soon leave for Canada.
by cautiously extending the ficial shows in January brought
limits of officially acceptable to public light, for the first
cultural activity, the regime time since the 1920s, some of
may find it easier to isolate and the Soviet avant-garde art of
stamp out hard-core dissidence. that decade.
The authorities' handling
of. Moscow's "unofficial" art-
ists illustrates the present ap-
proach. The artists, who held a
one-day outdoor show last
September, were subsequently
so harassed that they gave up
plans for a no-holds-barred in-
door show in December. After
accepting a degree of control,
however, some 20 of the artists
were permitted to hold a week-
long exhibit late last month.
The exhibit, which reportedly
was attended by thousands of
people, was the first officially
sponsored indoor show of un-
conventional art since the
1920s. The artists' Leningrad
colleagues, who had held an of-
ficially approved exhibit there
in late December, were pre-
vented by police from staging a
simultaneous but unofficial
show in a Moscow apartment.
The tactics of the authorities
split the dissident ranks over
whether to stand on principle
or to accept concessions with
strings attached.
The regime has taken the
same carrot-and-stick approach
toward individual dissident
gadflies,. For example, writer
Vladimir Maramzin, who was
charged with anti-Soviet slan-
der but had publicly apologized
for his "crimes," received only
To demonstrate that there
is now more tolerance within
the establishment, authorities
have allowed the narrow realm
These moves contrast with
the recent arrest of the stub-
born dissident, Anatoly Mar-
chenl4o, who is expected to go
on trial soon for repeatedly
violating his parole since he was
released from a labor camp
four years ago. In addition, the
increased harassment of the
most prominent dissident
spokesman, Andrey Sakharov,
seems to be a warning that his
stature at home and abroad
cannot guarantee indefinite
immunity.
The regime's tactics in cul-
tural affairs are being linked by
some Soviet intellectuals to the
appointment last November of
candidate Politburo member
Petr Demichev as minister of
cu lture. Demichev's appoint
ment required that he be re-
moved from the party sec-
retariat, where he had long
been responsible for propa-
ganda and culture, and had
been viewed as a generally
moderating influence. No suc-
cessor to the party post has yet
been announced, however, and
his present, self-assured im-
plementation of cultural policy
suggests that he is taking ad-
vantage of the vacuum in cul-
tural affairs on the secretariat
to exercise more authority over
culture than is usual for a min-
ister.
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ITALY: PARTY YOUTH DEFY FANFANI
[A sharp clash between the Christian
Democrats' leader, Amintore Fanfani, and their
youth section has added to the party's troubles
as it prepares for the crucial local elections
scheduled for June.
The Christian Democrats' youth organiza-
tion was lukewarm to the 67-year-old Fanfani
when he resumed control of the party nearly
two years ago and became increasingly critical
during the last year as the Christian Democrats
lost ground to the left in several key contests.
More recently, the youth leaders have ridiculed
Fanfani's platform for the coming elections,
which calls for tougher law-and-order measures,
criticizes the Socialists' demand for more gov-
ernmental influence, and rules out closer rela-
tions with the Communist opposition.
The deteriorating relations between
Fanfani and the young Christian Democrats
finally hit bottom last week when they charged
he was unfit to continue in his position. Fanfani
struck back immediately, dismissing the leaders
of the youth contingent and appointing a com-
mittee to select new ones. In retaliation, young
Christian Democrats occupied party offices in
several cities and staged a protest outside Chris-
tian Democrat headquarters in Rome.
The youth revolt will stiffen opposition to
Fanfani among left-wing Christian Democrats
and strengthen doubts about his leadership
among party moderates. Two left-wing fac-
tions-about 20 percent of the regular party
membership-opposed Fanfani in a vote on his
dismissal of the youth leaders. Grumbling within
the majority that supported him, moreover, sug-
gests that many of his supporters find the ouster
distasteful and are embarrassed by Fanfani's
handling of the affair.
The party left cannot dislodge Fanfani
unless they are joined by Prime Minister Moro-
the most prestigious left-of-center Christian
Democrat. Moro and Fanfani are long-standing
the two leaders recently reached an
both his determination to hold the local elec-
tions on schedule and his support for Moro's
fragile government; in return, Moro agreed to go
along with Fanfani's approach to preparing the
party for the elections.
"understanding." Fanfani reportedly reaffirmed
In any event, the purge of the youth sec-
tion will not help the Christian Democrats in the
coming elections, especially if a proposal to
lower the voting age to 18 passes parliament
before June.
The Communist Party is certain to try to
take advantage of the disarray, although for the
moment the Communists are busy ironing out
their- own internal differences before the party's
national congress later this month. The Commu-
nists are not nearly as divided as the Christian
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Democrats, but there are internal differences
over the timing and modalities of their push for
a direct voice in the national government.
In addition, Communist leaders are con-
cerned that the rank and file may be confused
by party chief Berlinguer's strategy of seeking a
modus vivendi with the Christian Democrats.
Berlinguer has argued since late 1973 that Com-
munist participation in a coalition with the
Christian Democrats is preferable to a leftist
PORTUGAL: CAUTIOUS OPTIMISM
[Moderate civilian politicians in Portugal are
professing cautious optimism about working out
an acceptable compromise with the Armed
Forces Movement regarding its future role in
politics. The moderates may also be somewhat
encouraged by the Movement's recent denuncia-
tion of the harassment of political parties, as
well as by the promulgation of a long-awaited
press law.
In mid-February the General Assembly of
the ruling Armed Forces Movement approved
tough and seemingly uncompromising proposals
for continued military dominance of Portugal's
government. The major non-communist parties,
however, were forceful in presenting their op-
position to the Movement's most objectionable
proposals during meetings with a special com-
mittee of the Movement last week. Leaders of
the Socialist and Social Democratic Center
parties now reportedly believe a reasonable com-
promise can be reached on the military's future
role in political affairs.
The Movement has the strength to dictate
conditions, however, and if it refuses to com-
promise, the parties will almost certainly back
down. The official opening of the campaign for
the constituent assembly election on April 12
appears to be tied to at least a basic agreement
on the military's future role. The beginning of
the campaign has already been postponed from
March 3 to March 20, and any further delay
would likely delay the election itself.
Perhaps stung by domestic and foreign
criticism of the disruption in recent weeks of
moderate and rightist political rallies, the Move-
ment has publicly denounced such activities. Its
Coordinating Committee blamed "professional
agitators" and accused them of playing into the
hands of reaction. The official communique
made no mention of the political affiliations of
the agitators, however, conveniently ignoring
the fact that extreme leftists have been largely
responsible for these violent incidents and that
they have been directed for the most part
against the non-communist parties. In any case,
government security forces still suffer from a
lack of training and poor discipline, and further
disruptions are likely to occur.
Promulgation of the press law, the draft of
which was released for public debate five
months ago, represents a clear gain for the
democratic forces. In its final form, the law
eliminates the "ad hoc press commission," the
continuation of which was sought by the Com-
munists. The system of arbitrary discipline of
the press by the commission has now been re-
placed by normal judicial procedures, including
the right of the accused to a hearing in court.
In other political developments last week,
the conservative Social Democratic Center and
the Christian Democrats announced an election
alliance to avoid splitting the conservative vote.
They will run a joint list of candidates in the
constituent assembly election, although individ-
ual party programs will be retained. Christian
Democrat candidates hope to benefit from the
Social Democratic Center's superior organiza-
tional structure, while the Social Democratic
Center hopes to profit from the Christian Demo-
crats' financial resources. The alliance should
also provide additional organizational strength
to withstand future harassment by extrem-
ists.
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TURKEY: POLITICAL WOES CONTINUE
)Last weekend, President Koruturk asked
Turkish caretaker Prime Minister Irmak to try
again to form a government that can win a vote
of confidence in parliament, but Irmak has al-
ready run into the same problems that doomed
his initial effort last November. Although Koru-
turk called on Turkey's feuding political parties
to suppress their differences in the face of the
national crisis brought on by the Cyprus prob-
lem and growing public disorders, the various
political leaders have continued to make the
same demands that frustrated all earlier at-
tempts to break the political impasse, now in its
sixth month.
As before, Irmak announced that his inten-
tion was to form a "national coalition" that
would combine Turkey's two largest parties-
Bulent Ecevit's Republican People's Party and
Suleyman Demirel's Justice Party. His hopes
were dashed, however, when Demirel announced
that his party would not participate. Neverthe-
less, Irmak will probably continue his negotia-
tions with other political parties in an attempt
to obtain enough support to win a vote of
confidence.
The other three members of Demirel's
four-party Nationalist Front appear to be fol-
lowing the lead of the Justice Party in rejecting
Irmak's coalition idea. The apparent hope of the
conservative Nationalist Front is that Irmak will
fail and that the President will then be forced to
turn to the front in an effort to break the
political deadlock. It may indeed come to this-
the four rightist parties together fall just seven
or eight votes short of a parliamentary major-
ity-but Koruturk strongly opposes such a move
and will search for another alternative.
Irmak's only real hope now of putting
together a majority government rests on
whether he is able to bring the Republican
People's Party and the small right-of-center
Democratic Party into a coalition government.
Both parties reacted favorably to his initial call,
but with Ecevit continuing to press for early
elections and no other conservative party willing
to join Irmak, the Democrats will probably
begin to back away.
The consequences of another Irmak failure
could be serious, as both he and President Koru-
turk have committed their prestige to a success-
ful outcome of the current discussions. Many of
the ministers in the present caretaker regime are
eager to return to private life, and public confi-
dence in the government is rapidly evaporating.
One newspaper in Ankara has suggested that if a
new government is not formed soon, Koruturk
might resort to his ultimate weapon, resignation.
LACK OP PARTIES' WILLINGNESS
TO PARTICIPATE UNDERMINES
"NATIONAL COALITION" EFFOR7.
The continuing deterioration of the
Turkish political situation will further compli-
cate efforts presently under way at the UN to
develop a new approach for an eventual settle-
ment of the Cyprus problem. The Security
Council's search for a compromise formula that
both the Greeks and Turks can accept has
centered on a resumption of the intercommunal
talks with a greater role for the Secretary Gen-
eral. The talks would be held in Nicosia and
New York. The Turks have taken a strong stand
against a direct role for the Security Council,
being especially opposed to the Greek Cypriot
demand for the inclusion of some non-perma-
nent members.
Any new round of the talks would soon
bog down, however, if the Turks were unwilling
or unable to make at least some minor conces-
sions. The present government has been unwill-
ing to make any significant concessions, in part
at least, because of its lack of political support
in parliament. Unless a new government can be
formed, the Turks are not likely to offer the
kind of concessions that would be satisfactory
to the Greek side in a new round of talks.
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SECRET
ETHIOPIA: LAND REFORM ANNOUNCED
the ruling military council announced a
sweeping land reform program on March 4. The
measure will probably arouse widespread rural
unrest and will pose a crucial test of the coun-
cil's ability to survive at a time when it is seri-
ously challenged by many other problems,
especially the insurgency in Eritrea Province.
The program is intended to alter funda-
mentally the country's land tenure system,
virtually unchanged for centuries. It provides for
the nationalization of all agricultural land and
for the transfer of the right to use the land to
tenants currently cultivating it, up to a maxi-
mum of about 25 acres each. These landholders
may not sell or transfer the property, but their
heirs are guaranteed the right to its use when the
current holders die. The government will com-
pensate the former landowners for any perma-
nent improvements, but not for the land itself.
tribal differences will add to traditional land-
lord-tenant animosities. Civil disturbances have
been a serious problem in the south for some
time.
The council expects its land reform pro-
gram to lead to large-scale violence, but it be-
lieves the peasants will eliminate or neutralize
landowners who have opposed the military gov-
ernment. The council is probably overrating its
ability to control events and is misjudging the
consequences of widespread disorders. The land
reform issue could transform incipient uprisings
in the northern provinces into full-scale rebel-
lions. The army, spread thin because of its in-
volvement in Eritrea, would be hard pressed to
put down any other revolts. A further weaken-
ing of the council's position will probably lead
to a revival of coup plotting by dissident mili-
tary officers.
All peasant debts and obligations to land-
lords are canceled. Landholders, except for
single women, are forbidden to use hired labor.
Large estates are to be state or communally
operated, but will temporarily retain their pres-
ent management.
Powerful landowners, especially those al-
ready leading low-level insurrections against the
military, can be expected to resist the edict. In
the northern provinces, they will probably be
joined by small farmers and peasants who are
strongly attached to a land tenure system based
mainly on communal ownership of tribal lands.
The reforms will probably be better
received among landless peasants in southern
Ethiopia, where the land tenure system has
featured large estates owned by privileged,
usually absentee, aristocrats. In this area, the
announcement may incite peasant attempts to
seize land arbitrarily or to kill landowners who
resist the council's proclamation. In many cases,
Fighting Continues in Eritrea
Government forces and guerrillas engaged
in numerous skirmishes this week. The US
embassy received word on March 3 that both
army and insurgent forces incurred heavy losses
during fighting on the road between Asmara and
Keren, about 55 miles to the northwest.
Ground resupply of government forces in
Eritrea continues to be hampered by mainte-
nance problems and rebel interdiction of roads.
Government forces do not yet face serious logis-
tic problems, but individual units have re-
ported shortages.
Meanwhile, the ruling council has adopted
a more favorable attitude toward Sudanese
President Numayri's three-week-old peace
proposal. A government delegation reportedly is
preparing to leave soon for discussions in Khar-
toum. The Ethiopians apparently are willing to
talk with rebel representatives as well as with
the Sudanese.
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Prospects for productive negotiations,
nonetheless, remain slim. The Ethiopians prob-
ably envisage only preliminary discussions, and
may have planned the visit mainly as a delaying
tactic. Numayri has called for talks without pre-
conditions, but the Ethiopians continue to insist
that discussions must be held within the frame-
work of national unity. The rebels, for their
part, are holding to their demand that the gov-
ernment first recognize Eritrea's right to
independence before negotiations begin.
RHODESIA: NEW ROADBLOCK
S
IThe arrest on March 4 yo Ndabaningi
Sithole, a major black leader, has halted talks
between the nationalists and Prime Minister
Smith concerning a constitutional settlement. A
prolonged break in the contacts would play into
the hands of hard-line nationalists who want to
resume the insurgency that the blacks formally
renounced last December when they accepted a
cease-fire agreement with Smith.
The Rhodesian authorities charged that
Sithole, who was freed under the truce agree-
ment after years in detention, was plotting to
assassinate rivals in the African National Coun-
cil, the umbrella nationalist group. ccording to
a statement from the Salisbury government,
Sithole was detained to protect his intended
targets, and will be tried in camera to prevent
victimization of witnesses.
Sithole was president of the Zimbabwe
African National Union, the principal Rhodesian
insurgent group until it merged with the en-
larged African National Council last December;
at that time, Sithole took a place on the execu-
tive committee of the council. Since gaining his
freedom, Sithole has antagonized Smith by
repeatedly threatening to resume fighting if
Smith did not accede to an early transfer of
power to the black majority.
Two meetings last month between Smith
and council leaders, including Sithole, failed to
produce agreement even on arrangements for
the constitutional conference called for in the
truce agreement. Smith probably gambled that
removing Sithole would tip the balance among
the council's leaders in favor of moderates who
are willing to maintain a truce during prolonged
negotiations. Following Sithole's arrest, how-
ever, Bishop Muzorewa, the moderate president
of the council, said that talks with Smith would
be suspended until Sithole is freed and that the
council will not participate in a constitutional
conference until Smith releases all political pris-
oners. Smith suspended the further release of
detainees in January, alleging cease-fire viola-
tions by the nationalists' guerrillas.
Sithole's arrest has already drawn a call for
a resumption of fighting from members of his
insurgent faction who have remained in Zambia,
where they had directed guerrilla operations in-
side Rhodesia. Zambian President Kaunda and
the other African leaders who helped arrange
the cease-fire have sought to restrain these hard
liners, who have never fully accepted the truce.
Smith's heavy-handed treatment of Sithole,
however, may force Kaunda and the other Afri-
can leaders at least to permit the insurgents to
step up preparations for a resumption of full-
scale guerrilla operations.
Smith may have hoped that the charges
against Sithole will convince South African
Prime Minister Vorster, who has collaborated
with Kaunda in the effort to promote a Rhode-
sian settlement, that the African National Coun-
cil is so dissension ridden that it will never reach
a consensus on the constitutional problem.
Sithole's arrest, however, could prompt Vorster
to step up South African pressures on Smith to
get on with the negotiations. The African
mediators may now ask Vorster to obtain
S i t h o l e's release in order to salvage the
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moo,
VIOLENCE IN LEBANON
Nc s(~tt~c,E'n
Armed clashes between Lebanese army
units and leftist and fedayeen forces occurred
on March 1 and 2 in the southern port city of
Sidon. The violence grew out of a demonstra-
tion on February 26 over fishing rights. A
cease-fire went into effect late Sunday, but only
after nine soldiers or police and 10 to 15 civil-
ians had been killed. Under the terms of the
cease-fire, the army withdrew the bulk of its
forces from Sidon and turned responsibility for
maintaining public security over to the local
police and to a hastily organized "popular com-
mittee" made up of representatives of several
local groups, including the leftists.
Prime Minister Sulh's four-month-old gov-
ernment was severely shaken by the clash. Three
cabinet members threatened to resign in protest
over the army's intervention; two others threat-
ened to resign if Sulh heeded calls from the
leftists to sack the commander of the army. For
the moment, Sulh appears to have fended off
calls from several leftist and Muslim leaders that
he resign as well. The Prime Minister did, how-
ever, appoint a new acting governor for southern
Lebanon, and is holding a series of cabinet meet-
ings that will determine the future of his govern-
ment.
The original demonstration mounted by
local leftists was exploited by the fedayeen-
probably elements of the extremist Popular
Front for the Liberation of Palestine-in an at-
tempt to draw the Lebanese army into conflict
with the large number of Palestinian comman-
dos in the area. Such a clash would embarrass
the moderate leaders of the PLO, who, during
the present period of uncertainty in their rela-
tions with Egypt, are extremely reluctant to
jeopardize their reasonably good relations with
the Lebanese government. Leaders of the largest
fedayeen organization, Fatah, were apparently
surprised by the fighting. They played a central
role in arranging a cease-fire
IRAN: DROPPING A FACADE
7/ - 73
[The Shah's announcement this week that
he is establishing a single-party regime represents
an abrupt reversal of his recent policy support-
ing the concept of a multi-party system. The
move reflects the Shah's extreme sensitivity to
past criticism and implies an even more intoler-
ant approach to any opposition in the future.
At a press conference on March 2, the
Iranian ruler announced he had established the
Iranian Resurgence Party and that it would
absorb the four parties that have been function-
ing within Iran's controlled political system.
Prime Minister Hoveyda was named to lead
the new organization for at least the next two
years. Membership will be based on support of
the monarchy, the constitution, and the "White
Revolution "the broad program of social and
economic modernization launched by the Shah
in 1963. The Shah urged all Iranians of votint
age to join the new party. Those who do not, he
made clear, risk being viewed as his opponents-
if not traitors-and "should not have any ex-
pectations" of sharing in Iran's progress.
The Shah's action negates his earlier
promise of freer elections. The general elections
scheduled for summer apparently are still to be
held, but it is not clear how they will be
organized within the new framework. In any
case, the multi-party system that has operated in
Iran since 1967 was never more than a facade
behind which the Shah continued to run the
country.
The Shah may believe that Iranian inter-
national prestige now is such that it is no longer
necessary to make a pretense of democratic
choice-a political mechanism he has always
regarded as foreign to the Iranian tradition. He
has recently spoken of Western-style parlia-
mentary democracy as a hindrance to decisive
action and a luxury Iran cannot afford. 25X1
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.2L-
.a.nc I
11- -7c
Recent developments in India's relations
with the USSR, China, and the US reflect a
policy of maintaining strong ties with the Soviet
Union while moving cautiously toward better
relations with the other two major powers.
Soviet Defense Minister Grechko, who was
in New Delhi from February 24-27 to discuss
India's defense needs, is the most important
Soviet official to visit India since Brezhnev's trip
in late 1973. Grechko's visit took on added
significance in view of Washington's recent
policy change that will permit a resumption of
arms sales to Pakistan. Although there is no
confirmation that any agreements were reached,
Grechko may well have signed a new military
accord. In any event, his visit created a generally
warm atmosphere for expected future discus-
sions on military cooperation. He probably also
renewed an invitation for Prime Minister Gandhi
to visit Moscow in the near future.
New Delhi has sought unsuccessfully for
the past year to secure new and better military
and economic aid from the Soviets and has been
dissatisfied with some aspects of trade relations.
Moscow, for its part, senses New Delhi's discon-
tent and wants to prevent an erosion of the
present close military and economic coopera-
tion. The Soviets are also concerned about
recent signs of China's interest in better rela-
tions with India. They are worried that an
improved Sino-Indian connection might weaken
their close ties with India.
Peking has recently emitted a number of
informal public signals suggesting that it wants
to improve relations, which have been frozen at
the charge level since the Sino-Indian war of
1962. The most authoritative indicator came
from Chinese Vice Premier Chen Hsi-lien, who
apparently made a point of stopping at Calcutta
airport last week on his way home from the
coronation of the Nepalese King. Chen told
newsmen gathered at the airport that Peking is
prepared to talk with India about normalizing
relations.
China's interest in better ties with India is
strategic. Peking hopes to reach agreement with
New Delhi on unresolved border problems and,
over the long term, reduce Soviet influence.
Indian resistance to Soviet pressure for political
and military concessions is apparently one
factor that has encouraged Peking to be more
flexible toward New Delhi.
The Indians have responded cautiously to
the Chinese initiatives, preferring to wait for
additional assurances through diplomatic chan-
nels. India's caution stems in part from China's
past failures to reciprocate Indian gestures to-
ward improved relations. Mrs. Gandhi is prob-
ably prepared to open a dialogue and eventually
upgrade bilateral ties once she is convinced the
Chinese are in earnest.
New Delhi reacted critically but with rela-
tive restraint to Washington's termination of its
ten-year embargo on arms sales to South Asia.
Although top Indian officials, including Prime
Minister Gandhi, are clearly not pleased that
Pakistan can again obtain weapons in the US,
they apparently want to avoid jeopardizing
India's recently improved relations with Wash-
ington. New Delhi hopes strengthened ties will
lead to substantial increases in trade and
aid.
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SECRET
LThe first summit meeting of OPEC chiefs
of state took place in Algiers this week. Rulers
of Saudi Arabia, Iraq, Libya, Indonesia, and
Nigeria decided not to attend but sent lesser
officials.
Algerian President Boumediene opened the
meeting on March 4 by proposing that the
OPEC states freeze the price of oil from the
fourth quarter of 1975 through the remainder
of this decade, only allowing the price to rise
with worldwide inflation. In December, the
price had been frozen for the first three quarters
of the year. Boumediene also proposed that oil
consumers guarantee the producers a minimum
long-term oil price, offer protection for OPEC
foreign investments, reform the world monetary
system to protect the producers from declines in
the value of consumer-country currencies, and
agree to join in a massive aid fund for develop-
ing countries.
The opening statement by the Algerian
President, hitherto one of the more radical of
the OPEC spokesmen, reflects the defensive
posture being assumed by the OPEC leadership
in recent months. Gone are the demands for
further sharp increases in the price of oil. In-
stead, the leadership seems to be concentrating
on maintaining recent gains and on getting the
world to recognize the cartel as a legitimate
player on the world stage.
The OPEC leaders endorsed a noncom-
mittal declaration of principles, accepting only
14 of the 48 propositions submitted by Algeria.
The heads of state gave general approval to a
five-year stabilization of the price of oil and
endorsed the principle of indexing oil prices to
imports by OPEC members, but left the task of
devising how such a scheme would work to
expert committees.
The OPEC leaders decided to shelve
Algeria's proposals that would have committed
oil producers to specific steps to ease the burden
of oil prices on the developing countries and to
press for reform of the international trade and
-1 9-ly,
monetary systems. The moderate oil producers
apparently want to ensure that Algeria does not
emerge as the spokesman for OPEC at coming
consumer-producer meetings.
According to press reports, Saudi Arabia,
Iran, and Venezuela led the way in rejecting the
establishment of the $10-15 billion aid fund for
the developing states. The conferees also passed
over a proposal that oil producers undertake a
program to supply approximately two thirds of
the impoverished countries' fertilizer needs.
Discussion of other sensitive issues that
could threaten the cartel's solidarity was post-
poned. Instead, the delegates were content to
endorse the actions taken last week by the oil
ministers in Vienna:
? To postpone until April consideration
of ways to offset the decline in the value of
the US dollar.
? To postpone coordination of members'
oil production levels until June, when fur-
ther studies are expected to be completed.
? To continue the freeze on oil prices
through the end of September 1975, con-
firming the decision made by the oil min-
isters last December.
? To permit the United Arab Emirates to
reduce the price of its oil by about 5 per-
cent.
Paris sent out invitations on March 4 to
nine countries and the European Community
for a preparatory energy meeting in Paris on
April 7. Saudi Arabia, Iran, Venezuela, and
Algeria were asked to represent OPEC. The
French timing of the invitations may be in-
tended to cut short a general OPEC debate
about which countries should represent the oil
producers and to influence the choice of coun-
tries representing oil-importing developing coun-
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LATIN AMERICA: REACTIONS TO KISSINGER SPEECH
2:2 3 i cP P6
!`t'hose Latin American countries that have, Havana's failure to respond so far is an
in varying degrees, taken an adversary position indication of the care with which the Castro
against the US, continued this tone in reacting regime is studying its options. The pause implies
to Secretary Kissinger's recent hemispheric pol- that the Cubans are considering a positive reac-
icy statement. Some commentators, however, tion, however, because a negative position
considered the statement a step toward reviving would almost certainly have been stated imme-
the dialogue between the US and Latin America. diately. Castro is keenly aware of the consider-
Ecuador stands out as the harshest critic of
the moment. President Rodriguez, en route to
the OPEC summit at Algiers, rejected what he
called US accusations that his government was
to blame for derailing the inter-American dia-
logue. An official communique from Quito
reaffirmed a policy of "not negotiating under
pressure?" and took another swipe at the US
Trade Reform Act.
Negative reaction flowed also from Ca-
racas, but it varied in stridency from party to
party. Government partisans agreed with the
Secretary's references to a Latin spirit of con-
frontation with the US, but averred that this
attitude is justified by history. Spokesmen for
more leftist parties saw veiled threats against
countries that associate to defend prices for
their raw materials.
Peru, which is preoccupied with internal
problems, has given no official reaction, but the
government-influenced press "rejected" the
speech and referred to the need for a Latin
economic organization that excludes the US.
The Lima media also discerned a "threat" in the
speech and deprecated statements on Cuba as a
"timid opening."
The Panamanian press was characteristi-
cally ambivalent. On the one hand, it endorsed
the criticisms voiced by Ecuador and Venezuela;
on the other, it characterized the secretary's
statements on the canal negotiations as reason-
able.
able impact his reply will have in Latin America
and on his relations with other hemispheric
leaders, and he wants to be sure that the timing
and tenor of his response will not be misinter-
preted as a weakening of his fundamental antip-
athy toward the US. He may choose March
13-a national commemorative day usually
marked by a major address by a top regime
official-to reveal his thoughts; in any case, his
remarks will be directed as much to the rest of
Latin America as to the US.
Reaction out of most other capitals has
been typically slow. Several small countries,
such as Haiti and the Dominican Republic,
which regularly voice pro-US opinion, have
commented favorably, but larger countries that
follow a moderate foreign policy have not yet
been heard from publicly. Whatever their cur-
rent attitudes about the state of inter-American
relations, the Latin governments will be anxious
to see what might develop from the Secretary's
trip to South America. Some remain skeptical
that the trip will materialize, and think that the
advance trip by Assistant Secretary Rogers may
in the end prove to be a "substitute."
This week, the OAS met and agreed to
postpone the General Assembly until May 8.
Diplomatic activity among the Latins in prepara-
tion for the conference will continue to be in-
tense. The agenda includes a number of impor-
tant issues, such as restructuring the inter-
American system and the election of a new
secretary general.
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CUBAN ECONOMY ON UPSWING
Cuba's economic situation brightened con-
siderably in 1974, mainly as a result of record
world sugar prices, better management, in-
creased productivity, and a growing labor force.
While gains have been exaggerated by Cuban
officials, the economy is without doubt on its
soundest footing since Castro came to power in
1959.
In the five years since the disastrous drive
to get in a ten-million-ton sugar crop, Havana
has been under Soviet pressure to change its
economic practices and has responded by:
? Improving planning procedures and
introducing cost-accounting principles.
? Raising labor productivity through the
re-introduction of Soviet-style work quotas
and improvements in labor organizations
and working conditions.
? Recruiting increasing numbers of
women into the work force.
? Mechanizing the sugar harvest, which
has reduced the need for Castro's disruptive
and uneconomic practice of recruiting "vol-
unteers" from other industries.
? Substantially reducing worker absen-
teeism, which had become a serious prob-
lem, by enacting an anti-vagrancy law.
? Using material incentives to supple-
ment revolutionary exhortation.
The change shows up in Cuba's dramati-
cally improved foreign trade picture in 1974.
Total export earnings soared to at least $2.6
billion-approximately double 1973-giving
Cuba what appears to be its first trade surplus
under Castro. Hard currency earnings alone
nearly tripled to about $1.2 billion.
cf' l1 ~' ~'
About 60 percent of Cuba's imports came
from communist countries, mainly the USSR.
The 40 percent from the non-communist world,
up from 25 percent in 1973, was made possible
by increased foreign exchange earnings and com-
mercial credits from Argentina, Canada, and
Peru. Cuba's major non-communist trading part-
ners last year were Western Europe, Argentina,
and Japan. Increased imports from non-commu-
nist countries further diminished the impact of
the US and OAS embargoes.
Despite these shifts, Cuba retains close eco-
nomic ties with the USSR, which continues to
provide virtually all of its petroleum needs-at
about 50 percent of world prices. The Soviets
also provide the major share of Cuba's imports
of capital equipment and food.
The improvement in Cuba's financial situa-
tion has encouraged the government to go ahead
with its first five-year plan, which will be
launched next year. The plan aims for continued
growth of from 6 to 9 percent a year. The
accent of the five-year plan will be on invest-
ment. Some $15 billion reportedly will be spent,
more than half of it for imported equipment.
The plan also confers some benefits on the
Cuban consumer, including a possible decrease
in rationing.
Given normal weather, sugar production
should increase gradually if mechanization con-
tinues. Production of other crops will probably
increase in response to better management and
the availability of more fertilizer. Construction
activity will be strong with emphasis on the
transportation and industrial sectors. Industrial
production ought to rise after several plants,
now being contracted for, are completed. No
major advances are anticipated in mining until
the end of the decade, when large investments in
the nickel industry will probably begin to pay
off.
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PERU: THE POLITICS OF SUCCESSION
Despite having suffered a stroke on Febru-
ary 28, President Velasco reportedly has met
with his cabinet ministers and is resisting pres-
sure from other military leaders that he step
down. Prime Minister Morales Bermudez is
urging this course of action,
Most top officers probably feel
that the time has come for Velasco to relinquish
power, even if he should recover from this
medical setback.
A definite prognosis on Velasco's condition
may not be possible for several more days, but
his condition remains unstable. If he suffered a
major stroke, his convalescence will be long and
his recovery will be incomplete. If it was only a
nearly complete.
There are probably disagreements within
the cabinet over who will succeed Velasco, and a
final solution may not be forthcoming for some
time. While a majority of officers in all three
services probably favor Prime Minister Morales
Bermudez as Peru's next president, his support
at the cabinet level, where more radical officers
are in the majority, does not appear as strong.
The radicals, along with Velasco, probably
prefer that an officer whose political views are
closer to those of the President should follow
him in office, and may be able to prevent
Morales Bermudez from assuming the pres-
idency on a permanent basis at this time.
Morales Bermudez probably has sufficient
support within the armed forces now to take
over at least some of the duties of president,
however, and if he asserts himself, he should be
able to capitalize on this support. If Velasco's
medical problems prevent him from resuming
his duties in any significant way, even the
radicals in the cabinet may eventually throw
their weight behind Morales Bermudez in the
interests of "institutional unity."
Another factor working in Morales Ber-
mudez' favor is the probability that many mili-
tary leaders feel that, now more than ever, the
country needs stable, consistent leadership,
something Velasco has been increasingly less
able or willing to provide in recent months.
These officers probably believe that Morales
Bermudez possesses the qualifications necessary
to begin building a base of popular support for
the regime and to avert violent anti-government
disturbances such as occurred in Lima in early
February. In addition, Velasco's current illness
underscores the fact that he may be incapac-
itated at any time, adding to the uncertainty
over the government's ability to rule effectively.
While President Velasco exhibits a phenom-
enal will to hang on to his position as head of
the government, he is not in as strong a position
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as he was in 1973, when he bounced back after
a near-fatal ruptured abdominal aneurysm and
subsequent leg amputation. Circumstances being
what they are, it is unlikely that Velasco will be
able to duplicate this feat a second time.
Argentina
TERRORISTS TARGET US CITIZENS
/.'L -1/3
j~'Terrorist groups in Argentina may be
planning further abductions of US citizens fol-
lowing the killing last week of the US honorary
consul in Cordoba. The incident has caused Pres-
ident Peron's government acute embarrassment
since it points up the inability of security forces
to retard the high incidence of violence even
under the provisions of a state of siege.
A press dispatch has also re-
ported that leaflets distributed by the consul's
kidnapers stated that their victim was "the first
on a long list of servants of imperialism in
Argentina" who will have to "render accounts."
The Peronist government might have been
able to produce one of the four prisoners the
guerrillas had demanded in return for the con-
sul's safety. Two others reportedly were dead,
and the third had undergone such harsh treat-
ment during interrogation that authorities did
not want to admit holding him.
So far the government has failed to explain
to the US ambassador's satisfaction why
bodyguards assigned to protect the consul were
removed a few days before he was kidnaped.
Questions have also been officially raised as to
why the government refused to try to ransom
the consul but subsequently acceded to terrorist
demands in order to secure the release of the
chief justice of the Buenos Aires provincial
supreme court.
Additional attacks against US citizens
would further complicate US-Argentine rela-
tions. Diplomatic personnel within the embassy 25X1
have already been reduced from around 200 to
90, and no one is currently assigned outside of
Buenos Aires. 25X1
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