CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A017600050001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: August 4, 2003
• Sequence Number: 1
• Publication Date: November 20, 1970
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Dept. review completed
Secret
40
20 November 1,970
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No. 0278/70
20 November 1970
Central Intelligence Bulletin
CONTENTS
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CAMBODIA - SOUTH VIETNAM: Economic negotiations
have been suspendedage 3)
TURKEY: Student unrest has broken out. (Page 4)
LATIN AMERICA: Several countries are re-evaluating
hemisphere policy toward Cuba. (Page 5)
CHILE: The Allende government is running into its
first challenges. (Page 6)
ARGENTINA: Levingston has reiterated that the mil-
itary will remain in power. (Page 7)
NATO: Any multilateral move soon toward a European
security conference appears unlikely. (Page 8)
ITALY: Colombo's four-party coalition is under
severe strain. (Page 10)
HAITI: Duvalier (Page 13)
BOLIVIA: Tin miners' pay (Page 13)
VENEZUELA-COLOMBIA: Continental shelf (Page 13)
EL SALVADOR: Profit restrictions (Page 14)
EUROPEAN COMMUNITIES - US: Soybean tax (Page 14)
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CAMBODIA - SOUTH VIETNAM: Economic negotiations
between the two countries have been suspended without
agreement on major issues.
The talks, which began on 9 November in Saigon,
reached an impasse when the South Vietnamese cabinet
withheld approval of agreements covering trade be-
cause the negotiators had failed to adopt an accept-
able piaster-riel exchange rate. Saigon also pressed
for a Cambodian contribution of over $38 million to
help defray the costs of South. Vietnamese military
operations in Cambodia, possibly as a bargaining
ploy designed to achieve a better negotiating posi-
tion on other issues. The South Vietnamese insisted
that the issue be tied to the disposition of common
assets of the former Indochinese states currently
held in foreign banks.
A second round of talks has been tentatively
scheduled for Phnom Penh. Agreements reached in
Saigon covering use of land routes, delineation of
the border for customs purposes, post and telecommu-
nications, and tourism presumably will be formally
signed at that time. Another effort. to find a com-
promise solution to the tougher issues may be under-
taken then. Some Cambodian leaders are already
hypercritical of their South Vietnamese allies and
Saigon's hard-nosed economic bargaining will not
sit well in Phnom Penh. r -1
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TURKEY: Student unrest, which has intermit-
tently plagued major urban centers for the past sev-
eral years, has again broken out in Istanbul.
A clash at Istanbul University on Tuesday be-
tween left and right: extremist students resulted in
an exchange of gunfire during which two students and
one policeman were injured. University officials
then closed the school but it apparently will reopen
next week. Although student groups in Istanbul have
clashed since classes were resumed following the
summer recess, this was the first involving serious
violence.
Student protests last weekend at Robert College
and Istanbul University had both anti-establishment
and anti-American overtones. One group of demon-
strators charged that the American-sponsored Robert
College is a "base of American cultural imperialism";
others bore placards damning America and passed out
leaflets calling for support for all "reformist"
forces.
The unrest at Robert College is compounded by
a power struggle between two leftist factions. It
is feared that American members of the college's
administrative board will continue as targets for
the students. Furthermore, it has become apparent
that a small minority of students is bent on destroy-
ing Robert College re ardless of the outcome of the
surface issues.
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LATIN AMERICA: Chile's resumption of diplo-
matic relations with Havana has prompted several
other countries to seek a re-evaluation of hemi-
sphere policy toward Cuba.
The Colombian foreign minister is sounding out
other governments as to whether the OAS should re-
consider its 1964 resolution that resulted in the
isolation of Cuba by member states. Mexico was the
only country that refused to comply with the reso-
lution, but Chile was the first to disregard it when
ties with Havana were resumed on 12 November.
The Uruguayan foreign minister believes Chile's
action threatens the "credibility of all inter-
American obligations."' He is worried that other
Latin American countries may also recognize Cuba
unless a majority in the OAS reaffirms the 1964 res-
olution. Peruvian President Velasco, for example,
reportedly favors an OAS review of the Cuba issue,
but he might eventually initiate diplomatic or com-
mercial relations if no OAS action is taken. Mexican
Foreign Minister Carrillo Flores is pleased that
Chile has renewed relations with Cuba, and has im-
plied that his country would vote to seat Cuba in
the OAS if the matter comes up.
Unless Havana publicly renounces its role as
an "exporter of revolution," which it flatly refuses
to do, a majority of OAS members probably would up-
hold the 1964 resolution if it ever came to a vote.
A number of countries, however, prefer to avoid a
public re-examination of Cuba's revolutionary role,
fearing it would aggravate divisions within the or-
ganization.
Cuba has indicated a willingness to consider
bilateral relations with those countries that pub-
licly disavow the OAS sanctions, but has vehemently
rejected resumption of participation in the OAS as
long as the US retains membership.
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CHILE: The Allende government is running into
its first challenges.
The government faces a dilemma in handling oc-
cupation of urban land by squatters and the seizure
of new but unoccupied housing, which had been as-
signed to and paid for by lower class workers. In
the Santiago area more than 4,000 dwelling units
have been seized since the 4 September election.
On 17 November, protesting homeowners
stopped
traf-
fic on a major highway out of the city
for 24
hours.
The government negotiated a truce, but
it is
still
faced with mobs of squatters, its own
promise
to
resolve the critical housing shortage quickly,
and the need for unpopular measures to enforce the
law and the homeowners' claims.
Some Christian Democratic Party (PDC) activ-
ists are promoting the takeovers, a tactic used
frequently by the Marxists against the Frei govern-
ment. The PDC is fighting to retain political in-
fluence among the urban poor, where it has long
contended strongly against the Communists and So-
cialists. The Communist Party is particularly con-
cerned about the seizures, and its members in the
administration have moved quickly to offset the ef-
fect of the seizures by meeting with the squatters
and initiating self-help programs.
Another potentially embarrassing situation
was created on 18 November when 9,000 workers at
the large El Teniente copper mine demanded a 70-
percent increase in pay and benefits. The mine is
now 51-percent owned by the Chilean Government and
is marked for rapid nationalization. These demands
are double the cost-of-living increase so far this
year, and are much higher than the gains recently
won by workers at the other large copper complex.
Most Chilean labor unions are dominated by the So-
cialists and Communists and have been unusually
quiescent since Allende came to power.
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ARGENTINA: President Levingston in a major
policy speech has reiterated that the military will
remain in power for four to five more years.
In a closed-door session on 16 November, Lev-
ingston told some 2,000 top military officers that
the armed forces must provide the continuity of
leadership that will enable Argentina to deal with
its neighbors--Chile, Peru, Bolivia, and Uruguay--
that are in danger of succumbing to "socialist pres-
sures." He stressed that Argentina must now demon-
strate that "democracy" is the best system for meet-
ing the problems common to the area.
On the domestic scene, the President upheld
the right of labor to take action to improve work-
ing conditions, but stated that the general strikes
of the past two months were the result of labor
"meddling in politics." In this regard, he said
that a decree would soon be issued outlawing po-
litical activity by labor unions and that steps
would be taken to stop contact between former
president Juan Peron in Spain and top Peronist
leaders in Argentina.
The officers of the three services were also
told that a new development plan would be unveiled
in December that would offer. "excellent" incentives
to foreign investment as long as it contributes to
national development and does not seek "exorbitant"
benefits and profits.
The reaction of the military officers to Lev-
ingston's policy briefing reportedly was highly
favorable, and US Embassy sources believe that the
speech helped to unite the military more firmly
behind the President.
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NATO: Most of the Allies now doubt that con-
ditions will be ripe by the NATO ministerial meeting
on 3-4 December to move toward multilateral explo-
ration of a conference on European security (CES).
The Allies feel that the Berlin negotiations
hold the main key to a decision to proceed from the
bilateral explorations that have been taking place
to multilateral talks. It is now generally antici-
pated that there will not be sufficient progress re-
corded on the Berlin problem before the ministerial
meeting. Attempting to keep developments in the next
two weeks from inspiring diverse assessments of
"progress" in the Berlin talks, the UK, France, US,
and West Germany have agreed to provide the other
Allies with much more information on the talks in
the next two weeks.
A number of Allies might be susceptible to
last-minute developments which could renew pressures
for multilateral talks on CES because there remains
a good deal of latent support for the CES concept.
Some Allies additionally feel that, desirable or
not, a security conference is inevitable, and that
the Alliance should prepare to make the most of it.
Support is growing, meanwhile, for a West Ger-
man proposal that the Allies take a new initiative
on mutual and balanced force reductions (MBFR) at
the ministerial. Bonn has told the Allies that it
favors a response to the Warsaw Pact offer to con-
sider talks with NATO aimed at reductions of "for-
eign" forces in Europe. The Germans have proposed
that the ministerial communique state NATO's will-
ingness to explore the Pact approach, with the ca-
veat that reductions of foreign forces be tied di-
rectly to eventual cutbacks of indigenous forces.
Bonn does not want the Alliance to move to actual
MBFR negotiations, however, until a Berlin settle-
ment is reached and other talks reveal a serious
Eastern bloc interest in substantive negotiations.
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ITALY: Prime Minister Colombo's four-party
coalition is under severe strain.
The government's major economic bill, which
is designed to ensure a dependable economic base
for its social reform program, is close to being
stalled in the legislature. Most Christian Demo-
crats, Republicans, and Unitary Socialists want to
push the measure through the Chamber, with night
sessions if necessary, to give the Senate time to
act before expiration on 26 December of the tem-
porary decree which the bill is to confirm. The
Socialists favor a more temporizing policy which
would permit acceptance of some Communist amend-
ments before disposing of the many amendments
offered by the ultraleft opposition.
Compromise in this manner with the Communists
would hold risks for the economic stabilization
features of the bill. Although the government has
the votes to force the measure through on a motion
of confidence, such a procedure would, at the very
least, deepen existing divisions within the coali-
tion. These center on the attitudes of the various
partners toward a greater role for the Communists
(PCI) in the national. political arena.
This question assumes increasing importance
to politicians with the approach of the presiden-
tial election in 1971. Christian Democratic and
Socialist contenders for the office are courting
Communist support. in addition, a number of So-
cialists and left-wing Christian Democrats see
merit in a future political grouping which would
include a reformed Communist Party. Many govern-
ment party leaders consequently are reluctant to
back a vote of confidence, which would draw clear
battle lines between the center-left and the PCI.
(continued)
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For its part, the PCI has increased its par-
ticipation in local and regional government over
the past year. In recent public speeches some
party leaders have expressed their interest in
steadily enlarging the party's political role at
the national level.
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NOTES
HAITI: President Duvalier, recently rumored
to be seriously ill, observed the armed forces day
parade Wednesday from the balcony of his office
rather than from his usual place of honor on the re-
viewing stand. Moreover, he remained seated through-
out most of the hour-long ceremony. The US Embassy
takes this as evidence that his physical
has deteriorated.
BOLIVIA: The Torres government has capitulated
to the tin miners by agreeing to restore the in-
flated pay scales that had been terminated in 1965.
This pay system encouraged corruption and nearly
bankrupted the State Mining Company (COMIBOL) during
1952-65, and its elimination was one of the Barrien-
tos government's major economic accomplishments.
The change is likely to lead to renewed deficits for
COMIBOL and also weaken government finances gener-
ally as similar wage demands are made on other state
enterprises. Of the estimated funds necessary to
finance the increased labor costs, approximately
42 percent is to be provided by COMIBOL bookkeeping
transfers, 32 percent by reduction of other costs
by COMIBOL, and 26 percent b government funding.
VENEZUELA-COLOMBIA: Representatives of the two
countries have opened the third round of discussions
to settle outstanding problems, including delinea-
tion of continental shelf boundaries in the poten-
tially oil-rich Gulf of Venezuela. Venezuela be-
lieves the Gulf could contain as much as 125 billion
barrels of oil, some eight times the country's
proved reserves. Colombia is much more eager to
exploit oil resources in the Gulf because its pro-
duction is expected to decline in the next few years
and threatens to fall short of meeting even domestic
needs by 1974. Although talks on the boundary issue
began in 1965, no apparent progress has been
toward a solution.
(continued)
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EL SALVADOR: The government has liberalized
restrictions on profit remittances for foreign in-
vestors in an effort to stimulate lagging investment.
The decree, which puts an end to limiting annual re-
mittances to ten percent of investment value for
manufacturing, extractive, and tourist enterprises,
was prompted by concern about the fall in private
investment since the 1969 conflict with Honduras.
Although the previous restrictions apparently did
not deter investment, their removal has symbolic
value in improving the investment climate. At the
same time, the decree could eventually become an em-
barrassment to the Sanchez government if economic
nationalism becomes an issue.
EUROPEAN COMMUNITIES - US: The community is
again considering Commission proposals that would
tax the EC's soybean and soybean product imports,
of which those from the US currently run over $500
million annually. This move would have the effect
of reminding Washington of possible retaliation if
pending US protectionist legislation is passed. The
proposals had dropped from view after strong US pro-
tests in October 1969 but showed up on the agenda
of a community agricultural committee this week,
when they were reportedly strongly favored by the
French and Italians and opposed by the Germans and
Dutch. The Germans said they would withdraw their
opposition if the Mills bill were passed. Whether
or not agreement is reached in further discussions
of the agriculture committee, the matter may be
brought before the EC Council in December or January.
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