MIDDLE EAST AFRICA SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000800120002-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 12, 2016
• Document Release Date: May 31, 2001
• Sequence Number: 2
• Publication Date: April 21, 1975
• Content Type: NOTES

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Secret
No Foreign Dissem
Middle East
Africa
South Asia
Secret
11.3
No. 0659/75
April 21, 1975
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No Foreign Dissem/No Dissem Abroad
Background Use Only/ControZZed Dissem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
? 5B (1), (2), and (3)
Automatically declassified
on: Date Impossible to Determine
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This publication is prepared for regional specialists in the Washington com-
munity by the Middle East - Africa Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
Saudi Arabia: Development Fund Activated . . . . 1
Kenya: Twilight for Kenyatta . . . . . . . . . . 2
Pakistan: Bhutto Opponent Ousted From
Azad Kashmir Leadership . . . . . . . . . . . . 8
Apr 21, 1975
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Saudi Arabia
Development Fund Activated
25XIA
The Saudi Development Fund, founded last
September to dispense low interest loans to less
developed countries, established a conservative
precedent at its first board meeting early this
month. It will apply stringent tests for applica-
tions for aid. Proposals must be well documented
and the feasibility of projects demonstrated. The
Fund will also require recipients to avoid "mixing"
Saudi assistance with aid from Communist or "Zionist"
sources.
At the board meeting, $291 million of the Fund's
$2. 9 billion was allocated for. four loans. . The current
Saudi budget provided the Fund with $87.0 million,
and the rest will be transferred over the next two
years. The board plans to obligate one half of the
$2.9 billion within three years and has the power to
.invest undisbursed funds until they are needed.
According to the Fund's charter, no more than 10
percent of the $2.9 billion can go to any one country.
Disbursement of individual loans will be over a
number of years, and the Saudis can unilaterally
cancel any undisbursed portion. Loans carry easy
repayment terms, but must be repaid in Saudi riyals.
At least two of the four. loans approved at the board
meeting were announced months ago. A $161 million
loan to Egypt for Suez Canal development, railway,
cotton carding, and telephone communications projects
was first made public last November. The second
loan approved, a $70 million loan for Malaysia,
appears to be a scaling down of an $85 million loan
reported last January. In addition, Uganda and Mali
each are to receive $30 million. Only the Suez
project has been fully approved; feasibility studies
must still be examined for the others.
Activation of the Fund follows a visit last month
by World Bank President McNamara. He declined the
Saudis' request for assistance in organizing and
operating the Fund, citing manpower limitations of
the World Bank, but most of the loans approved by
the Fund this month were based on World Bank project
studies. (CONFIDENTIAL)
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Kenya
Twilight for Kenyatta
President Jomo Kenyatta's hold on Kenyan affairs
apparently has about run its course. Kenyatta's
once towering prestige has gradually eroded over the
past few years; the pace has quickened recently by
widespread suspicion that the President or his
lieutenants were involved in the murder of J. M.
Kariuki, an outspoken government critic. The octo-
genarian Kenyatta may well survive the current crisis--
the most severe since. Kenya became independent 12
years ago--but political change appears near.
Erosion of Prestige
The affection and respect enjoyed by Kenyatta
until recently has been a major factor in the country's
stability. This esteem was based on his years of
imprisonment for involvement in the Mau Mau uprising,
his pre-eminent role in leading Kenya to independence,
and his image as a father figure devoted to the welfare
of all Kenyans.
The President's appeal and his exhortations for
unity have begun to wear thin in recent years, and
anti-Kenyatta sentiment has gained ground, especially
among groups that have lost out to Kenyatta's fellow
Kikuyu. Even among the Kikuyu, resentment between
northerners and Kenyatta's southern clansmen has
become more pronounced. The President has heavily
favored the southern Kikuyus in the allocation of
jobs, land, and other benefits; more often than not,
government development projects have been located in
the southern Kikuyu homeland. Kenyatta makes key
decisions on the advice of a small group of southern
Kikuyu political figures, known as the Gatundu group
after the location of the president's country home.
More recent developments have added to the mood
of dissatisfaction. The urban poor were hard hit
last year by a cost-of-living rise in excess of 15
percent, as well as by widespread shortages and an
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Q increase in unemployment. Organized labor con-
tinues to chafe under a strike ban imposed by
Kenyatta last summer, and union leaders may call a
~(r general strike later this month. University students
have become restive over several issues including
the government's unwillingness to improve living
conditions. The landless have been disappointed by
the government's failure to make land grants as it
did during the 1960s.
Stories of corruption in high places have not
helped. Among them are reports of illegal.export of
foodstuffs intended for the local market and the
acquisition of extensive land and wealth by high
ranking regime figures, especially Mama Ngina,
Kenyatta's youthful fourth wife. Kenyatta-himself
is now rumored to be involved in corruption and land
grabbing, an unthinkable speculation only two years
ago.
The government was rocked in February and March
by a series of unsolved terrorist incidents, the
worst of which resulted in 27 deaths and many injured.
The shadowy Poor Peoples Liberation Front claimed
responsibility for two of the bombings that produced
no casualties. Vandalism has even occurred on farms
belonging to Kenyatta and his wife. Several anti-
Kenyatta leaflets have appeared in Nairobi, and on
April 10 two bombs exploded near Kenyatta's residence
in Mombasa.
Political impact of Kariuki murder
Popular dissatisfaction with the Kenyatta regime
reached a new high following discovery early in March
of the body of J. M. Kariuki, a vocal and popular
opponent of the Kenyan government and an outspoken
champion of Kenya's have-nots. Kariuki, a member of
parliament, was known to have been closely watched
by security officials. The unusual and dilatory
police handling of the murder points to the involve-
ment of persons enjoying the protection of the south-
ern Kikuyu establishment. Many Kenyans believe that
Minister of State Mbiyu Koinange, a member of the
Gatundu group, and perhaps even Kenyatta, are implicated
in the murder and a cover-up attempt.
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Kariuki belonged to the Nyeri clan of the
northern Kikuyu, bitter foes of the southern Kikuyu.
The more numerous northern clansmen played the most
active role in the Mau Mau uprising only to have
the southern Kikuyu win power and material advantage
after independence. Some of the northern Kikuyu are
reported to be planning reprisals against southern
Kikuyu, including Koinange. They may have been behind
the terrorist incidents in February and March.
Kenyatta' Weakening Grip
The government's ability to restore public
confidence seems to have been hampered by Kenyatta's
unwillingness to delegate authority and by his appar-
ent inability to give sustained attention to pressing
political and economic problems. A close associate
recently described the President as distracted and
confused, at cabinet meetings on the Kariuki case he
was said to have difficulty concentrating and speaking.
Kenyatta's gradual fall from grace may have re-
kindled the hope of the Luo--Kenya's second largest
ethnic group--of winning a share of political power
befitting its size. At independence, the Luo and
their leaders Oginga Odinga and Tom Mboya played an
important part in the government. Kenyatta and
Odinga subsequently split over ideological differences,.
Thereafter, Odinga was consistently outmaneuvered by
the southern Kikuyu. In 1969 Tom Mboya, who was
widely considered as the successor to Kenyatta, was
murdered under.. circumstances that also cast suspicion on leading
southern Kikuyu.
Focus on Parliament
Kenya's parliament may be of crucial importance
to the fate of the beleaguered Kenyatta government.
In the past, Kenyatta's prestige and control of the
government permitted him to ignore critics in
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parliament, although backbenchers like Kariuki made
effective use of opportunities to voice grievances
and criticize government ministers. The backbenchers
elected to parliament last October are clearly more
talented than the government representatives. Just
before the crisis brought on by Kariuki's murder,
they won a larger voice in running parliament.
Parliament, now in an angry mood, has appointed
a select committee to investigate the Kariuki murder,
and seems determined to find out who was behind it,
and who tried to cover it up. The committee has a
majority of backbenchers, who will probably try to
carry out a thorough investigation.
Kenyatta and the Gatundu group may decide they
have no choice except to ride out the storm, but
Kenyatta seems out to try to
committee.
witnesses before
e committee appeared to have been told to be
selective in their testimony. Kenyatta's attorney
general--a member of the Gatundu group--has report-
edly directed the police to withhold files from the
committee.
Kenyatta and
the Gatundu group are preparing to surface their own
version of the Kariuki murder, which will claim
Kariuki had been involved in the terrorist incidents
of February and March and was killed by fellow con-
spirators. Kenyatta might adjourn
parliament and declare martial law. This could touch
off a sharp reaction from Kariuki's followers and
other opponents of Kenyatta.
There are signs that some influential political
figures are attempting to work out an arrangement
that will make Kenyatta a mere figurehead. Power
would presumably be transferred to a broader leader-
ship that would have to have the support of key mem-
bers of Kenya's strong civil service, the armed forces,
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and the police. These new leaders would probably
include prominent southern Kikuyu, but would also
have to be representative of a broader segment for
it to work.
Kenyatta's inclination would be to resist such
a scheme. A few years ago he balked even at the
suggestion that the post of prime minister be created
to ease his burden. Kenyatta is aware of his loss
of popularity, however, and this time the public's
attitude might convince him to agree to a face-saving
dilution of his power.
Only a few of Kenya's present leaders have much
prospect of playing a leading role in such a new
leadership. Vice President Daniel arap Moi, who is
widely viewed as an honorable man, appears to have
maintained his credibility in the wake of the Kariuki
murder. Moi is hampered by modest ability and his
membership in a politically unimportant tribal grouping.
Finance Minister Mwai Kibaki is considered one of the
most able members of the present government. He is
a northern Kikuyu and has kept his distance from the
southern Kikuyu establishment. Three capable back-
benchers--Charles Rubia, a northern Kikuyu, M. J.
Seroney, the popular deputy speaker, and Martin
Shikuku, another champion of the have-nots, are also
men to watch.
Armed Forces and Police
Kenyatta's future course will depend in part on
his assessment of the loyalty of the armed forces
and police. Following a military mutiny in January
1964, Kenyatta re-established firm civilian control
of the military. He began to bring in large numbers
of Kikuyu to offset the predominant position of the
rival Kambas among whom the British had recruited
heavily during the colonial era. Kenyatta also estab-
lished a small well-equipped Kikuyu-manned paramilitary
police unit, and staffed the new air force heavily
with Kikuyus. The military and police have generally
accepted subordination to civilian authority, partly
because of a sense of professionalism engendered by
a continuing close relationship with the British
armed forces.
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i 25X1 C
Although dominated by the Kikuyu, the security
forces have been affected by the Kariuki murder.
Animosities between northern and southern Kikuyu
have been heightened, limiting their dependability
in the event of trouble.
grumbling in the officer
corps over pay and weapons, and some Kamba officers
are said to be talking about a coup, but they
apparently have no plans to intervene soon. Military
leaders, like most Kenyan civilians, appear content
to wait and see the results of the parliamentary
committee's investigation. (SECRET NO FOREIGN DISSEM/
NO DISSEM ABROAD/BACKGROUND USE ONLY/CONTROLLED DISSEM)
Apr 21, 1975
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Pakistan
Bhutto Opponent Ousted From
Azad Kashmir Leadership
Supporters of Prime Minister Bhutto have
gained control of the local government of Azad
("Free") Kashmir, a semi-autonomous part of the
Pakistani-controlled portion of Kashmir. Bhutto's
successful effort to depose the area's chief
executive resembles his maneuvers to establish
and maintain control of governments in other
Pakistani regions where his own party lacks wide
popular support.
Last week, Sardar Qayyum Khan, the "president"
of Azad Kashmir since 1970 and long-time leader
of the largest political party there, was removed
from office by a no-confidence vote in the local
legislature. The vote occurred after a political
lieutenant of Bhutto put together a coalition of
several smaller parties, including the local wing
of Bhutto's Pakistan People's Party. Over the
past few years the Prime Minister has used financial
blandishments, political maneuvers, and intimidation
to forge pro-Bhutto governing coalitions in Pakis-
tan's western border provinces, where--as in Azad
Kashmir--his party lacks the broad public support
it enjoys in the more populous provinces. Similar
tactics probably were used to create the coalition
in Azad Kashmir.
Although Qayyum's successor apparently has not
yet been chosen--only an interim president has been
appointed--the removal of Qayyum is likely to give
Bhutto a more pliant regime in Azad Kashmir. Qayyum's
generally independent stance toward the Islamabad
government has displeased Bhutto. Qayyum's orthodox
Islamic outlook is at odds with Bhutto's secular,
socialist approach, and his hard-line attitude toward
India is inconsistent with Bhutto's efforts to reduce
differences with New Delhi.
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Qayyum's loss of the presidency will hurt his
prospects and those of his party in local elections
in Azad Kashmir next month. According to the US
embassy in Islamabad, Qayyum's popularity in the
region probably will not enable him to overcome the
election advantages the new coalition will derive
from control over local government resources and
backing from the central government.
India may criticize Bhutto for manipulating
events in Azad Kashmir, but its complaints will
probably be little more than pro-forma. The Indians
are satisfied with the status quo in the long-disputed
Kashmir region, two-thirds of which is under New
Delhi's control. Moreover, they recognize that
Qayyum has long been critical of their policies.in
Kashmir. and that he strongly. opposes better Indo-
Pakistani relations. (CONFIDENTIAL)
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