UPDATES OF DCI BRIEFING NOTES, 12 JULY 1966

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00827A000300110001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 83
• Document Creation Date: December 16, 2016
• Document Release Date: August 26, 2004
• Sequence Number: 1
• Publication Date: July 12, 1966
• Content Type: BRIEF

Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
25X1 Next 1 Page(s) In Document Exempt
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approve roi1
Release 2004/08/31 : CIA-RDP79T%9827A000300110001-2
12 July 1966
THAILAND
The Communists in Thailand appear determined to step up
the pace of their subversion.
The Peking-based "Thai Patriotic Front" marked its
first anniversary last December by calling for "armed
struggle" in Thailand to be expanded into a "people's
war."
--it is now openly warning that the "Vietnamese
people" may become involved in Thailand.
25X1
The Front's statement is pegged to the recent an-
nouncement that a small Thai military contingent is
going to South Vietnam. The statement also puts
great emphasis on the expanding US presence in Thailand,
apparently in an effort to portray the Communist
movement as a struggle for independence.
The Communists inside Thailand have become more ac-
tive during the past several weeks:
THAI-1
Approved For Release 2004/08/31 : CIA-RDP79TO0827A000300110001-2
 Appro For Felease 2004/08/31 : CIA-RDP79T9O827A000300110001-2
VOW
--a marked increase in the pace of Communist
terrorism, training, and recruiting has been
noted, principally in the northeast prov-
inces.
--on 28 May, a 22-man government police patrol
was ambushed by an estimated 100 insurgents
(NONG KI)
in Nong Khai Province,
--on 28 June, terrorists boldly entered a po-
(OO'-DORN)
lice station in Udorn Province and seriously
wounded three policemen.
--the Communists also launched their first at-
tacks against regular Thai Army elements in
the northeast, with a small attack and an
(00'-BON) (SACK'-ON KNACK'-ON)
ambush in Ubon and Sakhon Nakhon provinces in
mid-May.
--in part, the insurgents appear to be reacting
more aggressively to recent government sup-
pression operations.
The Thai Government continues to give strong backing
to US foreign policy, particularly in Southeast Asia.
--the Thais have been reassured over the past
year by US determination?in South Vietnam.
Approved For Rllease 2004/08/31 : CIA-RDP79T00427A000300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-;
25X1
The traditonal'animosity between Thailand and
Cambodia has:
--erupted in recent months into a series
of armed clashes at isolated border posts
along the 400-mile frontier.
THAI-3
25X1
Approved For ReI4
 25X1 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827AO90300110001-2
12 July 1966
CAMBODIA
Cambodia is still primarily concerned with trying to
avoid involvement in the South Vietnam war.
(SEE'-AN-OOK
Prince Sihanouk is presently groping for an effective
diplomatic response to what he views as a grave threat
to Cambodia--US public statements that hot pursuit of
the Viet Cong might involve military ground opera-
tions on Cambodian territory. He has:
--forcefully reiterated denials that Viet Cong
use Cambodia for sanctuary or as a source of
arms and ammunition,
--invited inspection and control of border areas
by an expanded International. Control Commission
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approjed For Release 2004/08/31 : CIA-RDP79T00827A00030p110001-2
it is clear that Cam-
bodia still is severely limited in its capa-
bility to, control Viet Cong activities, many
of which take place in isolated areas and
involve smuggling and other covert and il-
legal means.
(SEE'-AN-OOK)
Sihanouk is apparently making a new attempt at a po-
litical accommodation with the Vietnamese Communists.
--in an April 24 speech, he claimed that Cambodia
would sign agreements with North Vietnam and
the National Liberation Front, but he did not
spell out what the agreement would cover,
--the recent granting of diplomatic status to
Hanoi's commercial delegation in Phnom Penh
suggests that careful preparations are being
made to reach a formal understanding.
Sihanouk's objective in probing for a political un-
derstanding with the Communists at this juncture
is not clear, but it may be related to:
--a growing realization that the Communists
will need to make greater use of Cambodian
territory as the war in South Vietnam in-
tensifies.
Ap )roved For Release 2004/08/31 : CIA-RDP79T00827A0003001110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827A~
(SEE'-AN-OOK)
--Sihanouk's desire to increase Cambodia's
leverage in dealing with the Communists.
Sihanouk, meanwhile, is coming under increasing
criticism at home as the.country's fragile economic
situation continues to deteriorate. This criti-
cism has been aggravated by predictions that rice
exports,Cambodia's major source of income, will be
below the level of past years, apparently as a
result of a poor harvest, government mismanagement,
and elicit outflow of rice to the Viet Cong.
Approved For Release 2004/08/31 : CIA-RDP79T00827A00030g110001-2
 25X1
Ap
11 July 1966
``r
The military situation has remained generally stable
in Laos over the past year, with both Communist and
non-Communist: forces primarily interested in consoli-
dating their areas of control.
In north Laos, however, there have been sharp thrusts
and counterthrusts as Communist and government troops
have vied for control over disputed territory.
--sharp clashes have occurred recently between
(BON BON) (SAM-NOO-AH)
Ban Ban and Samneua as the Communists continue
their efforts to maintain access to the u.a_i.e
des ja-res from Samneua.
--Maior actions last winter saw the Communists
move south from Samneua town to capture sev-
eral key government positions along Route 6,
(NAH KANG) (WAH MONG) (MONG HEEM)
in.c lucain.g Na Khang, ilua Muong, and Muonq , eut .
--Government forces recently have rallied to
retake Na Khang and Muong Hiem.
in the south, Communist forces have been successful
in blocking government efforts to move into the in-
filtration corridor running through eastern Laos.
25X1 Approved For Release 2004/08/31 : CIA-RDP79T00827A04
 25X1
Ap
--the North Vietnamese, apparently determined
to retain absolute control over the key Pan-
handle areas, have positioned substantial
numbers of troops along the infiltration
routes leading south.
25X1
The Communists are continuing their efforts to move
substantial supplies south along the Panhandle road
net.
--Friendly guerrilla teams positioned in east-
ern Laos report that Communist trucks are con-
tinuing to move south along key infiltration
routes.
--Although the rainy season has begun, strenuous
Communist efforts to improve their roads may
permit some continued traffic through the sum-
mer months.
25X1
Approlved For Release 2004/08/31 : CIA-RDP79T00827k
 Approv d For Release 2004/08/31 : CIA-RDP79T00827 000300110001-2
The Communists have also been engaged in expanding
their road net in southern Laos:
--Possibly with the acquiescence of the Cambodians,
the Communists have completed a road leading
from northeastern Cambodia through the southeast-
ern tip of Laos to the South Vietnamese border.
--Reports indicate some supply activity from
Cambodia to South Vietnam along this route.
Approved For Release 2004/08/31 : CIA-RDP79T00827AO09300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T0
NNW
13 July 1966
(NAY WIN)
General Ne Win admitted recently that the Burmese
economy is in a "terrific mess," but he declined
to offer any new policies.
--foreign trade is still declining and foreign
exchange reserves have dwindled;
--artificial shortages in consumer commodities
have developed as a result of the government's
inept handling of the distribution system.
Ne Win has been as unsuccessful in coping with
mounting insurgency:
BURMA-1
Approved For Release 2004/08/31 : CIA-RDP79TOO82VA000300110001-2
 Approv dfol Release 2004/08/31 : CIA-RDP79T0082TA000300110001-2
--Insurgency normally rises at the beginning
of the dry season in October, but the level
of activity now appears to be somewhat higher
than usual.
(NAY WIN)
--Ne Win reportedly estimates that his govern-
ment now controls only 65 percent of the coun-
try, as compared to 75 percent four years ago.
The government continues its policy of neutrality,
nonalignment, and noninvolvement in international
affairs. Ne Win, however, is sometimes compelled to
assume a more accommodating posture toward Communist
China than he probably desires because of China's
vastly superior might and close proximity.
Ne Win's government is unlikely to undergo any sig-
nificant changes in the foreseeable future, barring
some external development which profoundly affects
Burma's interests.
--Economic problems will persist, but aid from
abroad, abundant natural resources, and the
moderate needs of the agricultural masses
should prevent a sudden collapse.
--Insurgency will continue to drain the gov-
ernment's resources and will continue to be
Approved For Release 2004/08/31 : CIA-RDP79T008p7A000300110001-2
 Approved Igor Release 2004/08/31 : CIA-RDP79TO9827A000300110001-2
the major obstacle to the political and
economic integration of the country.
(NAY WIN) endangered be-
The Ne Win regime is not currently
cause:
--the populace remains apathetic,
--the insurgents lack unity and centralized
direction,
--the army remains essentially loyal despite
certain misgivings about Ne Win's "Burmese
Way."
BURMA-3
Approved For (Release 2004/08/31 : CIA-RDP79T0082714000300110001-2
 25X1
Approvor1
12 July 1966
Relations with Pakistan continue to dominate India's.
foreign policy.
--India wants better relations. if only to satisfy
US and Soviet demands for peace on the subcon-
tinent.
--Government of Mrs. Gandhi believes strongly,
however, that meaningful Indian concessions
on status of Kashmir now would be political
suicide with general elections coming up next
February.
The Tashkent Declaration of January 10th eased much
of the tension the fighting created last fall, but
the basic underlying problems remain. There also
has been a gradual dissipation of the "Tashkent spirit."
--The first round of cabinet level talks held
in Rawalpindi in early March was generally dis-
appointing.
--Pakistani negotiators insisted that Kashmir
issue be tackled first; Indians were not willing
to do so.
--Both countries want to keep dialogue going,
but no date has been set for the second round
of cabinet-level meetings,
--Efforts by India and Pakistan to involve the
USSR directly in reviving "the Tashkent spirit"
have met with no success and the USSR appears
most reluctant to again put its prestige on
the line in attempting to resolve differences.
India has increased the size of its army and now holds
an approximately 5:1 numerical advantage over Pakistan.
25X1
Approved
Release 2004/08/31 : CIA-RDP79 0 27A000300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-
e maintaining substantial forces in
The Chinese ar
Tibet although there have been no frontier
signifi
clashes along the 1,500-mile Sino-Indian
They may resume their harass-
since mid-December. months.
ment of Indian border forces in
on
--The Chinese capability for
a major scale, however, is somewhat limited
and supplying large
by problem of deploying
forces across Tibet. Railheads are 500 to
1,000 miles or more removed from critical
pressure points against India.
important
_-Many prominent Indians--including
Congress Party figures--reacted with alarm
to the third Chinese Communist nuclear test.
__Nevertheless, the Gandhi government has re=
iterated its firm resolve not to develop an
Indian nuclear weapons system.
__Pressures for an Indian bomb will grow as
Chinese test program advances, but Nev Delhi
IND-2
25X1
Approved For Relo
 Approved :or Release 2004/08/31 : CIA-RDP79TQ0827A000300110001-2
will probably be able to hold to its policy
of restraint for next two or three years.
's fear of growing Chinese
Partly as a result of India
events
power, New Delhi has reacted nervously to recent
in Vietnam.
--Indians regard any event, such as bombings of
Hanoi and Haiphong, which could force US and
USSR apart and/or USSR and China together as
dangerous due to Indian reliance on Wash-
ington and Moscow in any future conf
with Peking.
--Mrs. Gandhi's 7 July proposals for ending war
in Vietnam__ should be seen in this context.
Mrs. Gandhi's visit to Moscow (12-16
of the war in
Vduileedtnam prior and to appears recent escalation effort to
ears to be primarily an
ring. Re-
ports the visit to Washington of last sp
wish to discuss some
ports indicate the Russians may
recent Indian moves, particularly closer
policy, which have been viewed as demonstrating
Indian ties with the US. India has faced severe food
problems as a result of one of the worst droughts n
recent history.
--Minimum Indian domestic requirements for food
grains for 1.966 are now estimated to be 11-12 million tons above anticipated produc
tion, Over 10 million tons have been committed
thus far, mostly under US PL-480 agreements.
Even with a good autumn harvest, India will
need to import 7-8 million tons in 1967.
IND-3
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00827A001300110001-2
 Approved Fpr Release 2004/08/31 : CIA-RDP79T00927A000300110001-2
--Although massive imports have eliminated the
threat of widespread starvation, extreme hard-
ship may yet be experienced in many areas during
next three months. Indian efforts to control
distribution are hampered by lack of transporta-
tion, and by administrative red tape.
Mrs. Gandhi faces other domestic problems besides
food scarcities and an upcoming general election.
--Incipient or actual tribal unrest in Eastern
India is tying down over 40,000 troops.
--Communal rioting of last spring in the north-
western state of Punjab could erupt again.
when the existing state is partitioned this
fall.
--Within Mrs. Gandhi's Congress Party there is
growing opposition from the members of the
left wing to what they regard as her subser-
vience to the West, particularly in the
economic field.
Approved Fpr Release 2004/08/31 : CIA-RDP79T0082741000300110001-2
 Approve For Release 2004/08/31 : CIA-RDP
90827A000300110001-2
12 July 1966
PAKISTAN
Pakistan's President Ayub is still under heavy pres-
sure to show some progress on the Kashmir issue.
--Domestic propaganda portrayed the 1965 war
with India as a victory. As it became ap-
parent that the war ended in a draw at best
there was subsequent confusion in Pakistan
followed by bitterness.
--Pakistan may decide to take the Kashmir prob-
lem back to the UN Security Council, hoping
that the US might support a new Kashmir move
and the USSR might not automatically veto it.
Pakistan is trying to bolster its armed forces.
--It is in the process of raising at least two
new divisions.
--Pakistan's armored units and air force were
drastically affected by suspension of US
military aid last fall.
--Pakistanis believe their primary need is for
spare parts for previously supplied US tanks,
planes, and other combat equipment.
Approved For Release 2004/08/31 : CIA-RDP79T0p827A000300110001-2
 Approveq'
--Washington's lifting of the prohibition on
the sale of nonlethal military equipment
has been greeted with little enthusiasm.
--Saudi Arabia, Turkey, and Iran have given
limited quantities of arms and.ammunition.
25X1
Communist China has become a major supplier
of military equipment to Pakistan since the
Indo-Pakistan hostilities last fall.
Small
arms, artillery, at least 150 medium tanks,
more than 40 MIG-19 aircraft, and a few
IL-28 medium jet bombers have already been
received from China.
25X1
25X1
Approved ForiRelease 2004/08/31 : CIA-RDP79T00827AQ00300110001-2
 Approved or Release 2004/08/31 : CIA-RDP79TO0
MOSCOW presumably would hope to counter growing Chi-
nese influence and further erode US prestige in
1 indi. by a policy of supplying arms to Pakistan,
Rawa p
t would need to balance these possible benefits
but i osi-
aainst probable serious damage to the Russian p
g
tion in India.
improved relations with communist China, Ayub
Despite p
has tried to avoid antagonizing the US.
--He is vitally interested in US economic aid
continuing (it recently resumed).
will permit
--He may hope Washington eventually
shipments of arms and spare parts again.
Ayub is also faced with growing political problems.
ncreasingly restive population of East Pakistan
The i overnment,
has long been suspicious of the central. g
which is dominated by West Pakistan.
-_Opposition leaders hope to capitalize on dis-
satisfaction with Ayub's handling of East
Pakistan's defenses during the war with India.
the central govern-
They have been pressing
to the province.
ment to grant greater autonomy
--The government, fearful that appeals of au-
tonomy today could become demands for independence
PAY,-3
25X1
Approved For Reflease 2004/08/31 : CIA-RDP79T00827A000400110001-2
 Approve For Release 2004/08/31 : CIA-RDP79T008
Ift
tomorrow, appears to be turning to more repres-
sive measures in dealing with its opposition.
In May, several East Pakistani opposition lead-
ers were thrown in jail, and in June, the largest
opposition newspaper in East Pakistan was closed
down.
--The government's problems in East Pakistan have
been further increased by popular dissatisfaction
over rising food prices. Recent reports indi-
cate that serious food shortages may develop
before summer is over.
In West Pakistan, Ayub continues to face popular dis-
content over his foreign policies.
--Ayub's opponents have taken the recent renewal
of US economic assistance and the nearly con-
current removal from the cabinet of anti-Western
(BOO-TOE)
Foreign Minister Bhutto as indications that he
is veering closer to the West and away from
Peking.
--The subsequent brief visit to Pakistan by
Chinese Premier Chou En-lai probably reflected
Peking's desire to reassess Ayub's position
on East-West relations in the light of recent
developments.
25X1
Approved Fot Release 2004/08/31 : CIA-RDP79T00827A0g0300110001-2
 Approved Fora Release 2004/08/31 : CIA-RDP79T0p827A000300110001-2
(BOO-TOE)
--Bhutto, who has considerable popular appeal,
could become a thorn in Ayub's side if he
allows himself to become a rallying point for
the presently disunited opposition forces in
West Pakistan.
--Ayub, however, appears to have retained the
all-important support of the armed forces
and, thus, should be able to survive any
challenge to his position in the immediate
future.
Approved For Release 2004/08/31 : CIA-RDP79T008274000300110001-2
 Approv d For Release 2004/08/31 : CIA-RDP79T00827A0003
12 July 1966
NIGERIA
Africa's most populous country (about 50 million)
has been ruled by its 10,000-man army since a bloody
coup on 15 January swept away the old power structure
of the conservative northern Muslims.
--the former federal prime minister and two of
four regional premiers were killed along with
a number of senior army officers;
--however, the new government has found it
necessary to retain much of the old adminis-
trative network.
Although the coup was initially accepted with con-
siderable enthusiasm, the future remains very uncer-
tain in a country that has been a stronghold of
moderate Africa.
The interim regime was established by army commander
(EE-RON-SEE)
Ironsi, who took over the coup from the original,
younger conspirators. His regime is reformist rather
than revolutionary in outlook.
--it has promised to maintain domestic peace,
end corruption and-tribalism, and provide a
new constitution;
25X1
Approved ForiRelease 2004/08/31 : CIA-RDP79T00827AO00300110001-2
 Apprc ve Fpr Release 2004/08/31 : CIA-RDP79T0g827A000300110001-2
--Various commissions will work on the coun-
try's problems, with military rule continu-
ing for at least three years;
--yin foreign affairs the military government
is generally well disposed toward the West
and aloof toward the Communist world;
--assurances have been given regarding foreign
investments but a more forcefully Africap
posture is taking shape.
Internally the country is headed for a stronger cen-
tral government, but there is strong opposition in
the north to the government's reforms.
(EE-RON-SEE)
--Ironsi's plans for a unitary government and
a unified civil service provoked antigovern-
ment demonstrations in several northern cities,
(HOW-ZA) (EE-BO)
where rioting Hausas attacked Ibo tribesmen
from the south; over 100 persons were reportedly
killed and several hundred injured before
order was restored;
--the nature of the demonstrations may indicate
some coordination among northern political
leaders and civil servants, unhappy over the
January coup which they view as an "Ibo take-
over";
Approved Fo4 Release 2004/08/31 : CIA-RDP79T0p827A000300110001-2
 Approve
For Release 2004/08/31 : CIA-RDP7900827A000300110001-2
--northern civil servants fear replacement by
better'qualified southerners.
--since the disturbances the government has
virtually retracted its stand on centraliza-
tion and has indicated a willingness to dis-
cuss important matters with the traditional
Northern leaders;
--tensions and tribal enmities probably will
continue with the possibility of renewed out-
breaks of violence in the north or in other
parts of the country.
An early breakdown of discipline in the army, which
has its own intertribal tensions, continues possible.
--there was reluctance to test the army's co-
hesiveness during the recent disturbances;
--the ability of the country's relatively small
security forces (police 18,000; army 10,000)
to ensure law and order is problematical;
--the younger officers active in the January
coup remain a problem; most-are in detention,
but are still widely regarded as heroes;
--some Western observers anticipate more coups
by army elements.
Approved For Release 2004/08/31 : CIA-RDP791~00827A000300110001-2
 ApproZd for Release 2004/08/31 : CIA-RDP79T '0827A000300110001-2
Over the longer run, there is a real question whether
the politically inexperienced new leadership will be
able to cope with the basic problems of regionalism,
tribalism, and underdevelopment any more successfully
than the old government.
Approved Igor Release 2004/08/31 : CIA-RDP79T008?7A000300110001-2
 Appr
ved For Release 2004/08/31 : CIA-RDP79100827A000300110001-2
12 July 1966
(QUAH-ME EN-CREW-MAH)
in Ghana, where the radical regime of Kwame Nkrumah
fell apart last February while he was in Peking,
the new leaders are Western-oriented political
moderates,
--the senior army and police officers had
long been dissatisfied with Nkrumah's
arbitrary rule, ties with Communist coun-
tries, and economic follies;
--since their take-over, they have given
every indication of being particularly
friendly to the United States;
--the change of regime has been popular with
the general publa,.c and virtually all seg-
ments of Ghanaian society.
The interim regime set up by the coup leaders
seems to be functioning reasonably smoothly,
--general policy is set by a National Libera-
tion Council of army and police officers,
(AN'-KRAH)
headed by popular General Joseph Ankrah;
Approved For Release 2004/08/31 : CIA-RDP79TOOP27A000300110001-2
 Appro
~00827A000300110001-2
--several specialized committees, such as
foreign affairs and economics, are staffed
by able and generally Western-oriented
senior civil servants;
--over 1,000 Nkrumah-regime opponents were
released from detention and others have re-
turned from exile. In turn, at least 500
Nkrumah-regime activists were incarcerated,
although small groups are now being released.
The new leaders have promised to return Ghana to
representative civilian government, but evidently
will be in no hurry to do so.
--they are publicly committed to sponsoring a
new constitution and turning power over to
whatever political force emerges, from free
(AN' -KRAH)
--However, General Ankrah has indicated pri-
vately that the country must first undergo
a period of re-education for 18 months to
two years;
--Recently, the governing council yielded to
pressure and set up a 23-member political
advisory committee;
GHA-2
Approved Fob- Release 2004/08/31 : CIA-RDP79T0g827A000300110001-2
 Approvedj For Release 2004/08/31 : CIA-RDP7RT00827A000300110001-2
--For the present all political parties and
activities remain proscribed, but some con-
tinge, nevertheless.
ress-
In the economic sphere, which offers the most_p
itg problems, the new regime appears to have a
sound appreciation of the magnitude of its task and
a determination to take whatever measures are re-
quired.
--in addition to emergency aid provided by
the international Monetary Fund and the US9
help has also been forthcoming from West
Germany, Canada, and the UK;
-_A three-month respite from external debts
was won in June from the creditor nations@
In external affairs, the new government has greatly
reduced Ghana's involvement with the Communist
world and aligned it with the moderate African
states.
Soviet and Chinese technicians have been
expelled and their embassy staffs sharply
limited. Other bloc embassies have been
closed and a complete rupture with Peking
GGIIA-3
25X1
Approved For Release 2004/08/31 : CIA-RDP79T0082YA000300110001-2
 Approved,F9or Release 2004/08/31 : CIA-RDP79TQ0827A000300110001-2
may occur;
--Most Ghanaian embassies in bloc countries
are being closed and the number of Ghanaian
students (about 1,000) is to be reduced,,
--In Africa the new regime has won general
acceptance, and relations with moderate
neighboring states have markedly improved.
Provided no serious split develops within the
ruling junta, the new regime seems securely in
power for some time to come.
--Unavoidable additional economic hardships
may well further dissipate the postcoup
elation;
--Nkrumah apparently does not pose any real
threat, although he clearly harbors dreams
of a comeback;
(SAY'-COO TOUR-AY')
----.Guinea's Sekou Toure`made threatening noises
about a forceful restoration, but there are now
indications he has begun to back offs
ApprovedlFor Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approved F
vap~
r Release 2004/08/31 : CIA-RDP7 0827A000300110001-2
12 July 1966
DCI BRIEFING NOTES
THE HORN
1. The Horn. of Africa (Ethiopia, Somalia, French
Somaliland) remains an area of endemic insta-
bility.
A. Haile Selassie still is the major influence
in the area, but at 74 plus his grip is
weakening somewhat and some jockeying for
position. has already begun.
1. Young educated Ethiopians in the govern-
ment and army are anxious for reforms
and have been pressuring the Emperor.
for changes, but he is willing to move
only slowly.
2. Most observers discount a coup and the
Crown Prince is expected to succeed to
the throne. The Crown Prince is pretty
much an unknown quantity and may be the
center of disputing traditional/modernist
forces.
B. Internal dissidence in four Ethiopian border
provinces, including Eritrea
25X1
Approved ForlRelease 2004/08/31 : CIA-RDP79T00Q27A000300110001-2
 Approve For Release 2004/08/31 : CIA-RDP79T00
18
tinued, keeping most of the Ethiopian security
forces occupied.
C. The presence of ethnic Somalis in Ethiopia
and also in. Kenya keeps the pot boiling be-
tween these countries.
1. The Somali Republic, with its Soviet-
trained and supplied army, is actively
working for the union of all Somalis
with the republic, and is training and
assisting Somalis in Ethiopia and Kenya
in guerrilla activities.
2. Ethiopian.-Somali border clashes have re-
ceded somewhat, but tension on the Somali-
Kenya border are high as a result of a
sharp step-up in Somali raids in north-
east Kenya.
a. Ethiopia and Kenya, already alarmed
by continuing deliveries of Soviet
military aid to Somalia, are consult-
ing on ways to stamp out Somali in-
surgency.
Approved For
Release 2004/08/31 : CIA-RDP79T00827 000300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
b. Nairobi recently broke off trade re-
lations with Mogadiscio, halted
Somali airflights into Kenya, and is
engaging in new tougher security
measures, including occasional "hot
pursuit" across the Somali borders.
Approved ForlRelease 2004/08/31 : CIA-RDP79T0g827A000300110001-2
 Approved
iww~
For Release 2004/08/31 : CIA-RDP7 0827A000300110001-2
12 July 1966
DCI BRIEFING NOTES
ALGERIA
(BOO-MAY-DIEN)
1. In. Algeria, Col. Boumediene's control remains
unchallenged. Rumors of impending government
shakeups, realignments and in-fighting continue.
A. He is moving slowly to untangle the prob-
lems inherited from Ben Bella last year
but discontent has mounted. A severe
drought this year, unemployment and lack
of development programs and technical and
managerial skills remain the principal
problems.
B. Algerian relations with France continue to
be fairly good. However, nationalization
of 11 mines (compensation, promised) and an.-
nouncement that French--abandoned properties
were the property of the Algerian state
seem certain to complicate the already dif-
ficult economic negot(BOO TEH-FLEE' KA)lled
when Foreign Minister Bouteflika abruptly
departed from Paris on. 29 April.
C. Boumediene's trip to Moscow in December, his
first visit outside Africa as chief of state,
AL-1
25X1
Approved For Rlelease 2004/08/31 : CIA-RDP79T00827PI000300110001-2
 Approve For Release 2004/08/31 : CIA-RDP79T008
Ift
seemed designed to get promised Soviet eco-
nomic projects under way, and to thaw Soviet
relations, which had chilled with the June
coup.
1. The Soviets agreed to finish the projects
under way and apparently no more.
(BOO-MAY-DIEN)
2. Boumedien.e then endorsed many Soviet
positions.
3. However, Algerians seem to be seeking
alternative developers for such projects
as the Soviet-promised integrated steel
complex and may have closed down the So-
viet-run petroleum and technical institute
near Algiers.
4. The walkout of the Algerian observers
from the 23rd CPSU because of the pres-
ence of a delegation. from the banned
Algerian Communist Party has apparently
hampered close political relations.
5. Soviet arms and instructors continue
25X1
Approved Fdr Release 2004/08/31 : CIA-RDP79T00821A000300110001-2
 Approved F4
*hme
D. Despite repeated denials of rumors that the
US is establishing bases in Morocco and
(BOO-MAY-DIEN) fears
Tunisia, the Boumedieneregime acutely
As a consequence, it is
"encirclement..'!
mending fences with radical regimes in the
Middle East and Africa.
25X1
Approved For Rel
 Approved or Release 2004/08/31 : CIA-RDP79 0827A000300110001-2
25X1
11 July 1966
MOROCCO
Morocco's King Hassan skillfully keeps his opposi-
tion divided and off balance, but his relations with
France are chilly and those with Spain are compli-
cated by Morocco's territorial claims.f/"Paris and
Rabat both recalled their ambassadors last January
but seem disinclined to take more drastic steps.
Their relations are coxnplicated by:
--the kidnaping in Paris last October of Moroc-
can opposition leader Ben Barka,
--Moroccan nationalization of French agricultural
properties and the imposition of trade controls.
By naming a new ambassador to Madrid, one having per-
sonal ties to Franco, Hassan hopes to:
--improve relations with Madrid,
--further Morocco's claims to Spanish-held Ifni
and Spanish Sahara.
A recent incident on the undefined Moroccan-Algerian
border has brought:
--revived fears of an Algerian invasion,
--stepped-up requests to the US and other
Western sources for new military equipment.
MOR-1
25X1
Approved Fo
 Approveedw For Release 2004/08/31 : CIA-RDP79 0827A000300110001-2
Morocco suffered a severe drought this year, and
will need extensive grain imports. With only mar-
ginal foreign exchange reserves, it seeks grant aid
on exceptionally favorable terms.
Approved f{or Release 2004/08/31 : CIA-RDP79T0082VA000300110001-2
 Approve For Release 2004/08/31 : CIA-RDPWO0827A000300110001-2
12 July 1966
TANZANIA
(NEW-RARE-RAY)
President Nyerere's militant approach to the prob-
lems of southern. Africa is still the dominant factor
Tanzanian affairs.
(TAN-ZAN-EE'-A)
--Tanzanians have been financially strapped since
London withdrew a $21 million loan. last December
after Dar es Salaam broke relations over the
Rhodesia issue.
--last month they signed their first development
loan. agreement with Moscow and another small
credit agreement with Peking.
--relations with the US have improved slightly,
although the Tanzanians remain suspicious of
US intentions in southern. Africa.
--on Zanzibar the pro-Communists are continuing
their efforts to eliminate US influence from
the island.
Approved For Release 2004/08/31 : CIA-RDP79T00q27A000300110001-2
25X1
 Approve For Release 2004/08/31 : CIA-RDP79T
12 July 1966
(OH-BO-TAY)
I. President Obote has consolidated his position
and made progress toward greater national unity
with his decisive move against the rebellious
Kingdom of Buganda.
A. The Kabaka (King) of Buganda--the country's
largest and richest region--had been contest-
ing Obote's assumption of full powers last
February. The Kabaka's demand in May that
the central government vacate the capital
cit led to the sacking of his palace by
((00-GAN-DA)
the Uganda Army and his own flight into
exile.
B. Obote has now divided Buganda into four ad-
ministrative units and has stripped its
tribal leaders of their special privileges.
His actions have been supported by the rest
of the country who resented Buganda's su-
perior, semiautonomous status.
Approved For Release 2004/08/31 : CIA-RDP79T00827t000300110001-2
 Approvvedl For Release 2004/08/31 : CIA-RDP7 00827A000300110001-2
12 July 1966
I. President Kenyatta's government and ruling
party are now fully in the hands of moderate,
constructive elements since the resignations
last April of former vice president Odinga and
his pro-Communist associates.
A. Odinga's new opposition party holds only
nine seats in the 171 member national as-
sembly and represents no serious threat to
the government at this time.
B. His Communist-financed party failed to win
any significant national following in last
month's by-elections, but its decisive vic-
tory in Odinga's home province reaffirmed
his undisputed leadership of Kenya's second
largest tribe... He has a firm platfIOn from
which to work for the 1968 general elections.
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00821A000300110001-2
 App
)1 July 1966
Egypt's fortunes at mid-1966 appear to be ebbing, but
Nasir is expected to retain power. Nasir's plans to
dominate a unified Arab world are in abeyance.
--little real threat in the Islamic pact being
pushed by King Faysal that Nasir has been vi-
ciously attacking--conversely little chance that
alliance of "progressive" Arab states that Nasir
has xoroposed will materialize.
5X1
5X1
The Egyptian economy faces what may be its worst perio
since the-1952 revolution.
--Nasir has not given economic reforms of Prime
(MOO-EE EH-DEEN)
Minister Muhyi al-Din his full support, and
these sound. measures are faltering.
EGY-1
Approvied For Release 2004/08/31 : CIA-RDP79T00827A0g0300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79T00827p000300110001-2
Despite a recent effort to appear cooperative with the
US, Egypt has not obtained a new PL 480 food aid agree-
ment.
--Egypt does not have the foreign exchange with
which to buy substitutes for US wheat, which
has supplied 80 percent of urban needs for nearly
four years, and the USSR is not likely to sup-
ply the large quantities needed.
--A serious infestation of cotton leaf worm
meanwhile threatens to destroy much of Egypt's
main export product.
Appro,ed For Release 2004/08/31 : CIA-RDP79T00827AO90300110001-2
 25X1 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
Next 1 Page(s) In Document Exempt
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 25X1
App
19- July 1966
IRAQ
President Arif's regime appears to have been somewhat strength-
ened as a result of crushing the 30 June coup attempt by pro-
Nasir Iraqis.
--the Republican Guard, and other loyal military units,
moved quickly to restore order;
(RAZZ-ZACK')
--dissidents led by former Premier Razzaq; he led similar ef-
fort that miscarried in September 1965; fled to Cairo;
--he and his associates in Iraq began to plot again, how-
(ERR-RUFF)
ever, when former president Arif, a brother of the pres-
ent incumbent, was killed in a helicopter crash last April.
25X
25X1
25X1
IRAQ-1
25X1
Appro
 Appcved For Release 2004/08/31 : CIA-RDP79T00827Ap00300110001-2
(RAZZ-ZACK')
The Egyptians' failure to give Razzaq any material assist-
ance probably will make possible the maintenance of a facade
of normal relations between Baghdad and Cairo, as was the
case following Razzaq's failure last fall.
--Premier Bazzaz has already publicly described the coup
attempt as "a domestic incident" for which the govern-
ment does not "accuse anyone outside Iraq";
--Nasir, nevertheless, may now have more difficulty in get-
ting the Iraqi Government to cooperate in his proposed
alignment of "progressive" Arab states.
(ERR-RUFF)
Arif's success in suppressing the pro-Nasir uprising may help
to ease relations with Iran.
--The Shah's fear that Nasir would use Iraq as a base for
subverting Iran has been a major cause of strain between
Baghdad and Tehran.
Last week's attempted coup is not likely to have any appre-
ciable effect on the troubled Kurdish situation.
--Although some Iraqi Army elements are probably unhappy
with the central government's recent conciliatory ges-
tures toward the Kurds, no significant army units
joined the putsch attempt of former Premier Abd al-Razzaq;
--The government has put forward a negotiating position
that goes much further in meeting Kurdish demands than
any previous government gesture;
Apptoved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 25X1
V*AW
25X1
AO
proved For Release 2004/08/31 : CIA-RDP79TOO827AOq
--Baghdad now apparently willing to grant the Kurds a large
degree of cultural and administrative autonomy; in addition,
(PISH
it appears willing to grant a slow phase-out of the "Pish-
MAR GAH)
Margeh," the irregular tribal armed force under the command
of rebel leader Mulla Mustafa Barzani;
--a de facto truce now appears to be in effect in Kurdistan.
The government appears sincere in attempting to end the
struggle, but mutual suspicions are still strong, negotia-
tions may flounder.
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 25X1 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Appreld For Release 2004/08/31 : CIA-RDP7?T00827A000300110001-2
sY July 1966
SYRIA
In Syria the radical Baathist clique which seized
power in February from the relatively moderate lead-
ers of the Baath party is still trying to broaden
its base of support and'is.threatened by increas-
ingly serious internal factionalism.
--the Baathists have made overtures to all
"progressive elements," including Syrian Com-
munists;
--the present cabinet includes one Communist
and the leader of the Syrian Communist party
was permitted to return in April after eight
years in exile;
--the regime also attempting to improve rela-
tions with Egypt's Nasir, a long-time enemy of
the Baathist movement.
--more importantly, the Syrians are working hard
to warm their relations with the USSR. Moscow,
evidently seeing the chance of a new break in
the situation, agreed in April to provide
$150-175 million in Soviet credits for con-
struction of Syria's long-planned dam on the
Euphrates River.
Approv4d For Release 2004/08/31 : CIA-RDP79Tg0827A000300110001-2
 25X1 Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
Next 1 Page(s) In Document Exempt
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 pproved For Release 2004/08/31 : CIA-RDP79T00827A0003001
1% Ju 1966
DCI BRIEFING NOTES
THE ARAB-ISRAELI SITUATION
1. In the Middle East, trouble over the Arab
scheme to deprive Israel of some of the Jordan
River water has diminished for the time being.
A. Arab leaders decided last September to avoid
further clashes with Israel over this issue
until Arab military strength is increased.
B. Work on the diversion canals in Syria and
Lebanon accordingly was postponed, but
Lebanon and Jordan are planning to construct
two related dams which Arab leaders do not
consider to be "provocative."
C. The decision to slow down was prompted by
the exposure of Arab military weakness in
the face of Israel's artillery strikes
against Syrian canal construction sites on
three occasions last year.
ARIS
25X1
Apprpved For Release 2004/08/31 : CIA-RDP79T00827A000300110091-2
 25X1
has been interpreted by Nasir
and anti-US Arab extremists as confirmation of
US favoritism toward Israel. Nasir has at-
tempted to link Saudi Arabia and Jordan with
the US-Israel agreement because of their re-
cent arms agreements with the US.
ARIS-2
25X1
25X1
,Approved For Release 2004/08/31 : CIA-RDP79T00827A00030011
II. Tension between Syria and Israel remains at a
high level. Israel might strike directly at
Syria, which has long supported the Fatah, if
terrorist activities continue along the Syrian
border. Israel has previously retaliated
against alleged Fatah terrorist bases in Leb-
anon and Jordan whose governments oppose the
Fatah,
III. The announcement on 20 May of the US sale to
Israel of "a limited number of tactical air-
craft"
Appr4
 25X1 }pproved For Release 2004/08/31 : CIA-Rl Pl9T00827A000300110001-2
li Ju, 1966
SUDAN
has made
government
In Khartoum, the moderate
in establishing a stable gov-
little progress
ent and solving the Sudan's many problems.
ernm party which dominates rural-based Umma
is r divided among
the coalition regime conservative older party members and a
n er group favoring modernization and
you g
the development of urban influence.
real Progress thus
g,,--The government has made no
reaching a political compromise with
far in outhern
Negroid separatists in the three s
provinces. the south,
The military campa_gn in
two -.thirds. of the
where more than
army is bogged down, con-
18,000-.man
tinues at a stalemate. The southern
oliticians remain disorganized and
p over the
111itia-
probably have little control oactive dissidents. A new government
csr6 way P- QCA
Vs under
tive to promote peace talks
may drag on indeiinitelv
but the conflict
SU-1
25X1 -
%WOI
Approved P
 25X1
AppLov
D T00827A000300110001-2
II. The Sudan Party was proscribed in
late 1965, but still retains influence in
the trade... tiul1O11 movement and in student and
professiOna I g1 oups .
A. The Com'aurnists can probably exploit both
the re.teriorating economic situation and
a growing, sense of discontent within the
milit~jr.ry, over the southern military cam-
paign.
SU-2
25X1 N..~
Approved For
 Approved F
12 July 1966
Fidel Castro's three vigorous appearances since 29
June dispel recent rumors concerning his state of
health and changes in his political position.
--withdrawal from public view in May and June
and increasingly bellicose behavior during
the past six months, however, may reflect
Castro's personal frustration over the re-
gime's inability to resolve basic economic
and administrative problems;
_-administrative purges of medium-level gov-
ernment officials in March and April and the
March show trial of two army majors prob-
ably largely aimed at restoring revolution-
ary dynamism to the regime and at discourag-
ing other would-be plotters against Castro;
--this spring Castro attacked the leaders of
Communist China, Chile, and Yugoslavia and
on 1 May implicitly criticized USSR for not
giving more assistance to North Vietnam;
CUBA-1
25X1
Approved For Rele
 Ap ro re j For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
--a state of alert was declared throughout Cuba
on 27 May following the killing of a Cuban
soldier by a sentry at the Guantanamo Naval
Base on 21 May;
--Castro may have believed the US was contem-
plating an attack, but it is more likely that
he was concerned about Cuban exile threats
and alleged assassination plots;
--Castro probably escalated the "crisis" to di-
vert public attention from pressing economic
difficulties, to test the efficiency of the
Cuban defensive system, to provide training
for the armed forces, and to flush out "coun-
terrevolutionaries."
Castro's position apparently remains pre-eminent;
nevertheless, several other military and party fig-
ures-are beginning to share the limelight. President
Dorticos' stock, in particular, continues to rise.
the 3 and.
_/n/5 July interviews Castro reiterated the _
theme that "as the revolution grows stronger,
individuals become less important,"--a reflec-
tion of his confidence in the Cuban Communist
Party and the continuing institutionalization
of the regime under its aegis;
Approged For Release 2004/08/31 : CIA-RDP79T00827Ap00300110001-2
 Appr ved For Release 2004/08/31 : CIA-RDP7$T00827A000300110001-2
--party has probably grown somewhat beyond 55,000
members--chosen for their loyalty and dedica-
tion to Castro;
--'s effectiv e collaboration of party and
here i
cadres (two thirds of the party's
military
central committee members are commissioned
officers).
he has no alternative to con-
that
Castro tinued recognizes
large-scale aid from the Soviet Union and as
a result continues to favor Moscow while relations
with China have been deteriorating.
Castro probably no longer views all of Latin,America
as on the brink of revolution but zeroes in on spe-
cific target countries, e.g., Venezuela, Colombia,
and Guatemala.
--19evertheless, Cuban propaganda on behalf of
armed revolution has been pushed up several
notches since the January Tri-Continent Con-
ference, and Cuba reportedly has sent mili-
tary personnel to help insurgents in the
Congo and to train native and foreign cadres
in Brazzaville.
Cuba's economic performance is spotty and the long-
range outlook remains uncertain. The 1966 sugar
25X1
Approved ForlRelease 2004/08/31 : CIA-RDP79T00827A00g300110001-2
 App roed Fpr Release 2004/08/31 : CIA-RDP79T0g827A000300110001-2
harvest of slightly less than 4.5 million tons was
two million tons short of the goal, and the outlook
for future sugar earnings is clouded by continuing
harvesting and milling problems, and by uncertain
world prices.
Approved for Release 2004/08/31 : CIA-RDP79T00827A0Q0300110001-2
 Approved Igor Release 2004/08/31 : CIA-RDP7PT00827A000300110001-2
12 July 1966
COLOMBIA
Colombian politicians are quietly preparing them-
selves for the horse trading that is sure to follow
the 20 July convocation of the new congress.
--The governing National Front won about 55 per-
cent of the popular vote--not seats in con-
gress--in the congressional elections on.
20 March;
--the opponents of the National Front can. block
government programs if they control one third
of the seats.
--Lleras is maneuvering to prevent this,
--the alignment of the new congress will not be
clear until after it convenes on 20 July.
(YER'-RAS RES-TREH'-PO)
--Carlos Lleras Restrepo, elected president by
a two-to-one majority on 1 May, is expected
to follow generally the policies of the present
government;
--he will be inaugurated on 7 August;
--he visited several Latin countries recently
and stressed economic integration with US aid.
--at his invitation the presidents of Ven. and Chile
n and possibly of Peru and Panama will meet him in
Bogota in August.
COL-1
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00827A00g300110001-2
 App e j For Release 2004/08/31 : CIA-RDP79T00127A000300110001-2
The Communists and other potential insurgents are
still split into several ineffective groups.
--The Moscow-line Communist Party may, however,
be preparing to play a more active role in
insurgency.
The army and police devoted their major effort to
guarding the polls and maintaining law and order
during the electoral period.
--They are returning now to the same slow but
successful counterinsurgent program that pro-
duced such good results against bandits and
guerrillas in 1964 and 1965.
25X1
Approved Foq Release 2004/08/31 : CIA-RDP79T00827AO09300110001-2
 Approved
12 July 1966
25X1
DCI BRIEFING NOTE
GUATEMALA
(WHO'-LEE-0 SEH' -ZAR MEN-DE ZON TA - EH in -GROW )
1. On July 1 Julio Cesar Mendez Montenegro
augurated as president for a four-year term.
A. Mendez' left-of-center Revolutionary Party
(PR) has a majority of 30 in the 55-seat
congress, and has had cooperation from the
rightist Institutional Democratic Party (PID),
(MLN), has only five legislative seats.
which holds 20 seats.
B. The far-rightist National Liberation Move
Mendez has so far exhibited an acute awareness
of the need to placate powerful rightist military
GUAT-1
25X1
25X1
Approved For 9
 App~oytd For Release 2004/08/31 : CIA-RDP79T0g827A000300110001-2
and business groups and has made constructive
efforts to allay their suspicions of his liberal
bent.
II. Guatemala's security problems continue.
A. Since early May, the Communist Party action arm,
the FAR, has kidnapped three high-level govern.-
ment officials and two youths and has engaged in
other, familiar hit-and-run terrorist activities.
On 24 June, a wealthy attorney was kidnaped and
later released for $100,000 ransom.
B. The three government hostages have been used to
pressure for the release of Communists imprisoned
by the government in early March. Some of the
Communist prisoners are known. to have been exe-
cuted, but the government has publicly main-
tained that the terrorists' claim that their
cohorts are being held is fiction.
C. One of the kidnapped government officials es-
caped on 9 June, and provided information which
may help security forces trail the terrorists
and locate the other victims.
D. Two youths kidnapped on 8 June are being held
for $20,000 ransom each.
Approved For Release 2004/08/31 : CIA-RDP79T00827, k000300110001-2
 25X1
Ap rro eJ
III. There has been some noticeable increase in, public
tension because of the government's inability to
halt terrorist activity, but the apprehension so
far has not come close to the near-panic which the
capital experienced last December when the level
of terrorism reached its height.
IV.. Although the successful transition from military
to civilian government has done much to dissipate
the politically tense atmosphere prevailing a few
months ago, prospects for stability remain uncer-
tain.
A. As a civilian and a liberal, Mendez as presi-
dent will be subject to close scrutiny by the
military and will have little margin for error.
2571
Approved
For Release 2004/08/31 : CIA-RDP79T00827 000300110001-2
 Approved For RPIPasp 900ainRI31 ? cIA-RWj9T00827A000300110001-2
12 July 1966
BPAZIL
Brazil is entering a difficult political period as the
country prepares for important national and state elec-
tions.
A. In September the legislatures in half of
the 22 states--including politically
important Sao Paulo--elect new governors.
B. On October 3, Congress will elect a new
president to succeed Castello Branco next
March 15.
C. On November 15, Brazilians will elect all
409 members for a new Chamber of Deputies,
and one third of the 66 Senators.
II. President Castello Branco has attempted to prevent the
political chaos that normally accompanies an election
year by forcing the reorganization of two new political
parties to replace the 13 that existed before all parties
were abolished in October 1965.
A. One of the two parties formed, the progovernment
National Renewal (COS-TAH EH SIL' VAH)
nominate/War Minister Costa e Silva, an army general,
as its presidential candidate.
Approved If or Release 2004/08/31 : CIA-RDP79T00847A000300110001-2
 Appro~v d ForlRelease 2004/08/31 : CIA-RDP79T00827~000300110001-2
B. ARENA'S candidate is strongly favored to
win the presidency, since the party holds
a substantial majority in congress. The
executive committee of the opposition
party, the Brazilian Democratic Movement
(MDB),has recommended that the party ab-
stain from presenting candidates in the
indirect elections.
III. The Castello Branco government has provided
relative stability during its two-year rule,
but public unrest is growing somewhat.
A. Organized labor is increasingly dissatisfied
with the government's inability to control
the persistent inflation, which has been
slowed but remains high--prices rose 21
percent during the first five months of
1966.
B. Administration opponents are seeking to
exploit the unrest with stronger attacks
on the government.
25X1
Approved For Release) 2004/08/31 : CIA-RDP79T00827A0003001 1 0001-2
 or Release 9T00827A000300110001-2
rd F
25X Approv
C. Military hardliners continue to seer more drastic
measures to ensure the success of the movement that
overthrew the Goulart regime in 19(4.. Castello
Branco retains strong support from the large majority
of his senior commanders, however.
D. Communist subversion has been generally contained,
but Communist influence is reappearing among unions
and student groups.
Iv. Substantial progress has been made in the groundwork
im-
a l
i
.
necessary for long-term economic growth and soc
provement.
A. The government has given priority to controlling
the inflation, and is likely to continue to do so:
the cost-of-living increase in 1965 was 45 percent,
but this has to be compared with the annual rate of
increase of 140 percent at the time of Goulart's
ouster in April 1964.
B. Brazil's fiscal position has improved greatly under
Castello Branco:
the budget deficit has been
sharply reduced ; foreign
grown considerably.
25X1
exchange reserves have
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 25X1 Apped For Release 2004/08/31 : CIA-R6P 3T00827A000300110001-2
C. Important reforms have been instituted in bane ing,
in tax system, and in agriculture, and others are
planned soon in the government's administrative
structure, housing, and education.
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 25X1
Approved
9T00827A000300110001-2
12 July 1966
At present Peru's internal security situation is
quiet. The Peruvian Government's success against
Movement of the Revolutionary Left (MIR) guerrillas
has caused serious disarry in the MIR organiza-
tion. Insurgency is now so limited and disor-
ganized that army troops have returned to their
barracks.
-The MIR will undoubtedly have to go
through a lengthy period of retrench i.eht
and reorganization before it can again op-
erate effectively.
Government resources and attention can now be
concentrated more fully on the socioeconomic re-
(BAY-LAH-OON'-DAY)
form programs of President Belaunde.
--Progress on.,.refbrms, which is dependent
upon executive-legislative cooperation,
faces an increasing political threat.
The opposition APRA party, dominant in
25X1 PERU-I.
Approved
 25X1
Apred or Release 2004/08/31 : CIA-RD49T00827A000300110001-2
congress, has taken a very hard line toward
the program, including censure of cabinet
ministers.
--Negotiations between the Peruvian Govern-
ment and the US-owned International Pe-
troleum Company over the status of IPC
concessions in Peru are continuing. The
principal obstacle to an equitable solution
to the problem seems to be political rather
than economic at this point. No solution
seems in sight before the end of the year.
25X1
25X1
Approved For R4
7A000300110001-2
 Approve ror Release 2004/08/31 : CIA-RgPW00827A000300110001-2
12 July 1966
Guyana, formerly British Guiana, became an independ-
ent, if troubled, member of the British Commonwealth
on 26 May 1966, with Linden Forbes Burnham as prime
minister.
--Burnham's People's National Congress and Fi-
nance Minister Peter D'Aguiar's United Force
govern in uneasy coalition, opposed by the
once-dominant pro-Communist People's Progres-
sive Party led by Cheddi Jagan;
--Early in 1969, the National Assembly will
probably opt to change Guyana to a republic,
abolishing the present British representation.
According to the constitution, elections must be held
by :late 1968. They will use proportional representa-
tion, an electoral system which favors the pro-Burn-
ham Negroes and part-Negroes (44 percent of the popu-
lation). Burnham, however:
--fears the voting strength of the pro - Cheddi
Jagan East Indians, now 50 percent of the pop-
ulation and increasing rapidly;
Approved For Release 2004/08/31 : CIA-RDP79TOOP27A000300110001-2
 25X1
Approve
--would like to import Negroes from other parts
of the Caribbean or join Guyana in a federa-
tion with predominantly Negro Caribbean na-
tions to offset East Indian voting strength;
--might also try to rig or postpone the elec-
tions--anything to remain in power.
25X1
Both the government and its opposition are beset
with difficulties.
--Burnham's coalition is an unnatural mixture
of conservatives and pragmatic socialists who
got together only to keep Jagan out of office;
(DUH-GARR)
--Burnham wants a republic but D'Aguiar favors
continued close ties with Britain;
--D'Aguiar has threatened to leave the govern-
ment many times because of Burnham's "fiscal
irresponsibility," and because Burnham has
not consulted him on government policies.
Various leaders of Jagan's Pro-Communist People's
Progressive Party--the PPP--have wanted the party to
use violence against the Burhham government. Jagan,
however:
--fears that Burnham's government might take
extreme 'repressive measures against himself
and the PPP,
Approved q
 Approv For Release 2004/08/31 : CIA-RDP79T0
P827A000300110001-2
--has been unable to make up his mind whether
to risk violence,
--has let his indecision prevent the PPP from
acting effectively.
Although the Burnham government is slowly improving
the?country's economic prospects, there is still a
wide variety of serious challenges:
--unemployment now stands at over 20 percent
and is rising;
--the country's surplus, high-cost, rice pro-
duction is difficult to market;
--British troops, the main stabilizing factor
in the country, are scheduled to leave in
October; Guyana's security forces will prob-
ably not be able to deal with more than
small-scale violence;
--border disputes with Venezuela and Surinam are
likely to be settled peaceably:
--Venezuela claims over half of Guyanese terri:'
tory. Last February, a mixed Venezuelan-
Guyanese committee was charged with finding
a solution within four years... If they fail,
some of the peaceful procedures prescribed in
the UN charter are to be :invoked..,
Approved f{or Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approve
For Release 2004/08/31 : CIA-RDPW00827A000300110001-2
12 July 1966
VENEZUELA
At this time Venezuela is one of the more politi-
cally stable and economically sound nations of
Latin America. Although it has been beset in re-
cent years by numerous political problems, the
government has successfully weathered all storms.
One of Venezuela's major problems concerns the
leftist guerrillas and terrorists.
--The Communist Party, or PCV, and the Move-
ment of the Revolutionary Left, or MIR,
are at odds but apparently are still al-
lied and still jointly direct the FALN--the
Armed Forces of National Liberation.
--FALN activity throughout 1965 and through
mid-July 1966 has been slight and for the
most part purely defensive, however, and
many PCV and MIR leaders now want to abandon
violence in favor of more legitimate politi-
cal action.
25X1
Approved For Release 2004/08/31 : CIA-RDP79T008g7A000300110001-2
 Approved
NW-V
The more militant members who favor ex-
panded guerrilla and terrorist operations
have bolted the established parties and
set up their own FALN, apparently with
Cuban support.
--about 250 guerrillas are still in the
field, although generally inactive for
the moment. They are supported by about
500 urban sympathizers, many of them in
the universities
25X1
Approved Fbr Release 2004/08/31 : CIA-RDP79T00847A000300110001-2
 Approved
12 July 1966
Ecuador faces converging adverse factors which con-
tain the explicit threat of instability and Communist
penetration at the top. An interim civilian regime
proposes elections in September to a constituent as-
sembly
[while economic
and political considerations imperil the government.
Of prime concern to the government is fiscal
deterioration stemming from:
--unfavorable international trade conditions,
--irresponsibility of politically influential
export-import interests,
--development expenditures of the previous
regime.
--the cost of living has been rising, real
wages falling, the usually stable currency
has declined, and monetary reserves are at
a critical low--$16 million.
25X6
Approved or Release 2004/08/31 : CIA-RDP79T00 327A000300110001-2
 Approved For Release 2004/08/31 : CIA-RDP79TO9827A000300110001-2
--the recent $lO_million budget support loan
should help the financial situation, but this
is only a stop-gap measure.
The political future is uncertain EE-BAH-RAH)
threatened by ex-President Velasco Ibarra who re-
turned from exile on May 24.
_-Political parties are weak, disorganized,
and intent upon exploiting the constituent
assembly currently scheduled to be elected
3 September and convened 3 November.
--Interim President Yerovi may be named to a
four-year term by the assembly.
--Many politicians hope to use the assembly
to bar re-election of ex-President Velasco.
Velasco could probably win a direct presidential
election which he demands instead of indirect
elections through a constituent assembly.
--Communists and extremists have shown abil-
ity to exploit uncertainty, have been
favored by the permissiveness of Yerovi,
and stand ready to exploit Velasco to gain
power from the top.
25X1
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00827A000400110001-2
 Approvq
d For Release 2004/08/31 : CIA-RDP79 827A000300110001-2
The armed forces, the only significant institution
outside of the church, have lost prestige through the
March 1966 fall of the military government and are
reluctant to resume power.
--some officers might try to forestall
(VAY-LAS-KO)
Velasco by a coup, but this could pro-
yoke the people and oblige resort to a harsh
dictatorship.
--enlisted ranks tend to favor Velasco, but
the high command strongly opposes him and
backs the Yerovi government in its plan for
a constituent assembly.
Approved For Release 2004/08/31 : CIA-RDP79T00827A000300110001-2
 Approve
V For Release 2004/08/31 : CIA-RDP O0827A000300110001-2
1.1 July 1966
BOLIVIA
(BAH-RAY-EN-TOES)
Rene Barrientos and his Bolivian Revolutionary Front
(FRB) won a decisive victory in the 3 July national
elections, although final results are not yet known.
Maneuvering is going on behind the scenes over minority
congressional seats, and announcement of blection re-
turns has therefore been suspended. However:
--Barrientos' FRB is guaranteed a four-fifths
majority of the 102 deputy and 27 senatorial
seats,
--in a close race, the Christian Democratic
Community, a front for the rightist Bolivian
Socialist Falange (FSB),is in second place,
--Victor Andrade's faction of the Nationalist
Revolutionary Movement is running third.
The Barrientos regime will be faced with a variety
of new and inherited problems when it takes office
on 6 August. Politically:
--The FRB is not a cohesive, disciplined po-
litical force and could disintegrate in the
near future,
Approved Fob- Release 2004/08/31 : CIA-RDP79T008271A000300110001-2
 Approve Igor Release 2004/08/31 : CIA-RDP79TQ0827A000300110001-2
--The FSB may seek inclusion in the government,
--the new president may have to rebuild his
political base, possibly moving his political
philosophy to the right because of pressure
from the military and the FSB.
(BAH-RAY-EN-TOES)
Barrientos will also be faced with several chronic
economic problems, including a budget deficit. The
unfamiliarity of the new leaders with these problems
may cause considerable delay in developing an economic
program.
The major problem for Barrientos is to obtain the
withdrawal of the armed forces from active control
of the government. As in the past, General Alfredo
Ovando is the key to future government-military re-
lations. If an issue develops between these two
mutually antagonistic men, there could be trouble.
Ovando reportedly:
--told foreign correspondents on 4 July that
"the armed forces will observe the new gov-
ernment and will act again if they think
that the interests of the people are not
well served,"
--did not set a limit on how long the military
would give Barrientos to prove himself.
25X1
Approved ForiRelease 2004/08/31 : CIA-RDP79T00827A000P00110001-2
 Appro
Please return to
&sentation Staff
12 July 1966
The negotiations with France on its military with-
drawal from NATO remain in the probing stage, and
final outcome is anybody's guess.
The French-German talks regarding a new basis for the
continued stationing of French troops on German soil
have so far had no decisive result.
--the German offer of 30 June--an interim arrange-
ment--was apparently accepted by Paris in its
7 July aide memoire.
--the French reiterated, however, that the 1954
agreements are still sufficient legal basis
for the troops to remain--if Bonn wants them.
After weeks of sparring and procedural difficulties,
the Fourteen may be able to agree this week to pose
giu,estions designed to smoke out precise French in-
tentions.
25X1
Approved For Release 2004/08/31 : CIA-RDP79T00g27A000300110001-2
 ApproVveeeel For Release 2004/08/31 : CIA-RDP79p 0827A000300110001-2
--France may also be asked whether it will con-
tinue to pay its previous share to NATO mili-
tary budget, whether NATO-financed infrastruc-
ture still available to allies, whether France
will help pay for relocation of NATO facili-
ties outside France.
Since French position on such specifics is so ambiguous
it appears high.time such questions were asked.
--although French have hinted forces might be
made available in wartime, they have been
vague on detail and insisted this purely
"military" matter.
--although they have hinted they might pay for
some NATO projects, question is whether they
should be allowed to pick and choose in this
way.
--we have been told even so basic question as
continued participation in NATO military com-
mittee has been subject of some argument in
French Government.
Ambiguity in French position is probably in part sharp
tactics and in part also absence of final decisions
by De Gaulle.
Approved For Release 2004/08/31 : CIA-RDP79T008p7A000300110001-2
 Approve
--However, we think De Gaulle will find it dif-
ficult to strike balance he apparently wants
between being formally allied and being free
from binding arrangements.
Finally, US has begun physical withdrawal from France,
but numerous issues this raises as well as other bi-
lateral questions between us still are to be nego-
tiated.
25X2
Approved Igor Release 2004/08/31 : CIA-RDP79Tog827A000300110001-2