CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A011100080001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: April 7, 2003
• Sequence Number: 1
• Publication Date: May 7, 1968
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
STATE review(s) completed.
Secret
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No. 0149/68
7 May 1968
Central Intelligence Bulletin
CONTENTS
South Vietnam: Situation report. (Page 1)
r - Y
visit to Yugoslavia. (Page 4)
Jordan: Effects of the war have brought a severe
economic recession. (Page 5)
Indonesia: The government is preparing for a
contrived vote in West Irian. (Page 6)
Ja2aan: Price stability could give Sato a political
boost. (Page 7)
Uruguay: New cabinet appointments fail to resolve
party factionalism. (Page 8)
Czechoslovakia: New mission to Moscow (Page 9)
Spain-Gibraltar: Harassing of traffic (Page 9)
Belgium: Attempts to form new government (Page 10)
Burundi: Anti-American demonstration (Page 10)
Guatemala: Pro-Communist appointment (Page 11)
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PHNOM
PENH-'
D.milit.iix.d Zan.
Dong Ha
?,Qusng TO
?Hue
SOUTH VIETNAM
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C South Vietnam: Sharp fighting continues in many
areas of South Vietnam, and there are indications
that the enemy plans stepped up attacks against sev-
eral high-priority targets.
Several sectors of I and II Corps and the Saigon
area saw continued enemy action on 6 May. More than
400 Communists were reported killed in a series of
engagements near Hue, Quang Tri city, and the US
Marine base at Dong Ha on the night of 5-6 May. Sev-
eral allied positions in the western highlands and
the coastal provinces of II Corps came under enemy
rocket and mortar attack, and ground fighting was
reported in Binh Dinh Province.
The Phu Tho race track area of Saigon's Cholon
section has been the scene of continued engagements.
Prisoner interrogations indicate that elements of
the 271st and 272nd regiments of the Viet Cong 9th
Division are participating in the action. In Eau
Nghia Province several miles northwest of the cap-
ital, three South Vietnamese battalions engaged a
battalion-size North Vietnamese force and reported
killing 167.
Information indicates that
the enemy offensive action may continue. In addition
to the elements of the two 9th Division regiments re-
ported to be operating in Saigon, the division's
third regiment has been reported nearby.
LT here are indications that cabinet changes, pos-
sibly including the replacement of Prime Minister
Loc by Tran Van Huong, may be imminent.]
7 May 68
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Poland-Yugoslavia: The Poles reportedly have
canceled a long-planned visit of a parliamentary
delegation to Yugoslavia, claiming that the Yugo-
slav press has created an "unfavorable climate."
The Polish delegation was scheduled to arrive
on 5 May and was to have met with President Tito.
The Yugoslav press, which has approved the
present trends in Czechoslovakia, has openly criti-
cized the anti-Semitic and anti-intellectual cam-
paign in Poland. The official party daily has pub-
lished a protest by a group of 160 Yugoslav intel-
lectuals against expulsions of professors and stu-
dents from Warsaw University.
The Poles have already made representations
in Prague over the "lack of objectivity" of Czech
press reports on Poland, and last weekend several
Polish newspapers deplored certain developments in
Czechoslovakia. The cancellation of the Yugoslav
visit is another indication that the gap between
the Polish regime and several Eastern European
countries may be widening.
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Jordan: tThe country is undergoing a severe
economic recession, even though its hoard of for-
eign exchange is the highest in history.)
Recent subsidy payments from Kuwait, Libya,
and Saudi Arabia have brought Jordan's foreign
exchange holdings to about $285 million. The
subsidies, agreed on at the Khartoum conference
last year, amount to about $106 million a year
Effects of the June war, however, have
plunged the economy into a severe recession. Busi-
ness activity has been depressed by political
and economic uncertainty, lack of government
guidance, and loss of tourism and markets on the
Israeli-occupied West Bank. Agriculture has been
hit hard by the evacuation of the Jordan River
valley and a water shortage in the Ghor region,
caused by damage from Israeli artillery. Pri-
vate investment has all but stopped. Unemploy-
ment has increased greatly with the influx of
new refugees and a drop in the number of gain-
fully employed. West Bank refugees have swelled
the potential labor force more than 20 percent.
IThe large influx of foreign aid has had no
impac on the recession because the funds accu-
mulated have not been used for investment.)
Recent arms purchases from the US and other
countries will not materially reduce current Jor-
danian foreign exchange reserves, because payments
are spread out over a period of years. The Jor-
danians probably will continue to hoard their
foreign exchange surplus against future disasters
or the day when the subsidies cease.?
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Indonesia: LThe government, concerned over a
favorable outcome next year when West Irian deter-
mines its future status, is beginning to prepare the
ground for a contrived vote..
LDjakarta regards the retention of West Irian as
basic to its national interests. It fears that an
independent West Irian would give impetus to other
separatist movements throughout the scattered re-
public. It therefore feels that the only realistic
solution is to arrange a pro-Indonesian decision and
then work to improve the administration of West
Irian. Government officials are seeking to gain
Western understanding for some kind of formula that
would satisfy the letter of Indonesia's commitment
to the UN while keeping West Irian in the republic.?
\Djakarta realizes its chances of winning a
plebiscite are negligible. It is inclined to base
an "act of self-determination" on the cooperation
of those tribal leaders it feels it can influence.j
';While Indonesia probably can arrange a favor-
able result, it will try to do so without leaving
conspicuous impressions of pressure or manipulation
which might draw international criticism .1
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Japan: Prime Minister Sato stands to benefit
in elections this year if the comparative price
stability of recent months continues.
Sato has been heavily criticized in the past
for failure to hold down consumer prices, but, par-
tially as a result of his efforts, Japan's con-
sumer prices for the fiscal year ending 30 March
increased only 4.2 percent compared with 6.4 per-
cent in the preceding year. This improvement is'
the more remarkable because the higher rate of
real growth in gross national product in the past
year would normally lead to greater price increases.
Other economic criteria on which the Sato
administration will be evaluated are its ability
to deal with balance-of-payments problems over
the next few months and the manner in which it
handles the restrictive monetary policy invoked
last fall to cope with these problems. I
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Urucua : LPresident Pacheco's appointments to
his new cabinet do not resolve the party factional-
ism that has obstructed his economic program.I
{
,.,The President announced the appointment of six
new cabinet ministers on 2 May to replace those who
resigned following the senate's censure of Foreign
Minister Luisi and Labor Minister Acosta y Lara.J
Although Pacheco had stated that he might re-
organize his cabinet along nonpartisan lines to in-
clude members of the opposition Blanco P-arty, dis-
cussions with Blanco leaders failed. Except for For-
eign Minister Venancio Flores, all cabinet ministers
are members of the Colorado Party. Flores, president
of the politically insignificant Civic Christian
Movement, was selected because of his personal pres-
tige.)
Pacheco has reaffirmed his commitment to pres-
ent economic policies. A leader of one important
Colorado faction has already broken with the gov-
ernment and will not support its policies. The US
Embassy has commented that the new cabinet, in ef-
fect, is a minority government.
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h_. Czechoslovakia: Dubcek's statement last night
that Prague will send another delegation to Moscow
"within the next few days" suggests that the Soviets
took a tough. stance on granting economic aid. The
party leader admitted that the Czechoslovak delega-
tion requested economic aid last weekend but stated
only that the Soviet leaders will "study" the re-
quest. He said that Moscow again expressed "anxiety"
lest Czechoslovakia's "democratization" go too far,
although he added that the Soviets received a Czech-
oslovak explanation on this subject with "understand-
ing." Dubcek's remarks suggest that Moscow is seek-
ing political concessions from-Prague in return for
economic aid, and that he is consulting with other
Czechoslovak leaders before acting further.
Spain-Gibraltar: [Yesterday Madrid stepped up
its campaign to regain Gibraltar by barring traffic
across the Spanish-Gibraltar land border. The only
exceptions to'the order, are Spanish workers employed
in the British colony and civilians from Gibraltar
granted passage for humanitarian reasons. The clo-
sure will cut down tourist trade, an important con-
tributor to Gibraltar's economy
Talks between the UK and Spain were broken off
in March after London had refused to discuss Gibral-
tar in the context of the UN resolution calling for
its decolonization. The closure will increase pres-
sure on the British just as they begin talks with
Gibraltar's ministers on calling a constitutional
convention to provide more local government. The
Spanish move is expected to reinforce British deter-
mination to sustain the colony, politicaLly and eco-
nomicall
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Belgium: Socialist leader Collard has failed
to form a new coalition and caretaker Prime Minister
Vanden Boeynants or another Social Christian leader
may be asked to try. Chances for such efforts have
brightened since the Liberals, who had seemed bent
upon going into opposition, are willing to join in
a new coalition with the Social Christians and seek
agreement on constitutional reforms _o ease the lin-
guistic crisis. Such a coalition, however, would
have only a slim majority in parliament, and would
need the support of two thirds of parliament to pass
the controversial but necessary constitutional re-
Burundi: Two government officials have been
arrested for instigating an anti-American demonstra-
tion on 2 May at the opening of a jazz concert spon-
sored by the US Embassy. Another demonstration,
this one against the American Embassy, may emanate
from opposition elements within the government and
from the official youth group, which seem bent on
challenging President Micombero.[Several dissidents
within the government were arrested last month fol-
lowing rumors of an impendin coup and of a Hutu up-
rising in the countr side
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Guatemala: President Mendez has appointed for-
mer president Juan Jose Arevalo as ambassador to
Rome. The move could spark reaction from rightist
elements or the armed forces, who consider Arevalo
a Communist. Arevalo's return from exile in March
1963 to run for President precipitated a military
take-over, and for the past year he has been in Mex-
ico. Should Arevalo's nomination as ambassador
cause adverse reaction, President Mendez probably
would attempt to appease the military by pointing
out that the government is merely trying to get him
as far away from Guatemala as possible.
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