CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A017900070001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: July 15, 2003
• Sequence Number: 1
• Publication Date: January 2, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Department review completed
Secret
4 A
2 January 1971
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No. 0002/71
2 January 1971
Central Intelligence Bulletin
COMMUNIST CHINA: Peking has issued a cautious New
Year's Day pronouncement. (Page 1)
VENEZUELA: Caracas appears t;o be considering a
changein its Cuba policy. (Page 3)
USSR-NATO-US: Moscow has attacked the outcome of
the December NATO ministerial. (Page 4)
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LIBYA-ALGERIA: Setback for Qadhafi (Page 6)
INDIA: Mrs. Gandhi's election plans (Page 7)
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POLAND: Church-state relations (Page 8)
CHILE: Nationalization of banks (Page 8)
BRAZIL: New ransom list (Page 9)
ANDEAN COMMON MARKET: Foreign investment code
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COMMUNIST CHINA: Peking's cautious New Year's
Day pronouncement, if anything, tended to downplay
progress over the past few months in party and gov-
ernmental reconstruction and in the international
arena.
The joint People's Daily - Red Flag - Liberation
Army Journal editorial on 31 December was remarkable
for its failure to cite even the recent formation of
the regime's first provincial party committee since
the Cultural Revolution. Although party building at
the higher administrative levels. also seems to be
picking up momentum in. several other provinces, Pe-
king still appears to feel little cause for self-
congratulation over the pace of the program that re-
putedly has been its first order of domestic business
for the past year and a half.
The editorial reiterated calls for unity and
organizational discipline first issued at the Ninth
Party Congress in April 1969, thus attesting to the
complexity of personnel and policy issues which have
been plaguing the party-building process from the be-
ginning. Significantly, the editorial appealed to
senior cadres in the party to follow Mao's revolu-
tionary line "still better"--an indication of the
high degree of frustration in Peking over the diffi-
culty high-ranking civilian and army leaders are
having in resolving the political squabbling that
still hampers effective administration in many lo-
cales.
Even though the regime has announced important
ministerial appointments in recent months, the edi-
toria.l still is vague on the timing of the National
People's Congress--which is expected to serve as a
forum for unveiling the central government apparatus
and the regime's new five-year plan. Regarding the
latter, however, the editorial struck a more positive
note in formally announcing that 1971 will be the
2 Jan 71 Central Intelligence Bulletin
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first year of the Fourth Five-Year Plan. Neverthe-
less, predictions for the economy were even more
modest than last year, and no claims were made that
the current planning process will generate another
"great leap forward." Although specifics on the
Five-Year Plan are lacking, its keynote apparently
will be pragmatism.
The editorial's stock-taking of improvements
in Peking's international position in the past year
is surprisingly limited and China's diplomatic
achievements, such as Canadian and Italian recogni-
tion and the favorable UN vote, are pointedly ig-
nored. Instead, Mao's statement on 20 May that
revolution is the sign of the times is resurrected,
highlighted by the new themes of Latin American sea-
bed claims and Guinea's defense against invasion.
Both have parallels in China's own situation vis-a-
vis the US and USSR. Predictably, Peking's favorite
betes noires--US and Soviet collusion and Japanese
militarism--are also paraded. As in last year's
editorial, Moscow's revisionist policies are de-
scribed as bankrupt, and this time around the Chi-
nese seize on recent events in Poland to illustrate
the "deep crisis" in Eastern Europe. In contrast
to last year, however, personal invective against
Soviet leaders is omitted.
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VENEZUELA: Venezuela appears to be considering
a change in its Cuba policy.
The secretary general of the governing COPEI
party said at a press conference this week that
the Organization of American States should allow
governments to re-establish relations with Cuba if
they are interested in doing so. This could be
done, he said, now that "Castro has changed his
conduct with regards to the interference in the in-
ternal affairs of other countries." He added that
recognition did not imply approval of a system of
government.
In addition, Venezuela reportedly has asked
Trinidad's Prime Minister Williams to explore the
possibility of a rapprochement with Cuba, saying
that Venezuela would follow Trinidad's lead. This
overture evidently was made some time ago and there
are no indications that the Williams government is
prepared to act on it.
These actions, which may amount to no more
than a. trial balloon, suggest that Venezuela may be
interested in the eventual incorporation of Cuba
into the inter-American system. Caracas would have
to move cautiously because it was :Largely respon-
sible for the OAS decision in 1963 to isolate Cuba.
Because of its earlier strong opposition to Castro,
any change in Venezuela's policy would greatly in-
fluence other Latin countries.
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USSR-NATO-US: The USSR has made an official
demarche attacking the outcome of the December NATO
ministerial meeting and alleging US obstruction of
efforts toward detente in Europe.
The Soviet document, delivered by Ambassador
Dobrynin on 28 December, concentrates its fire on
the "linkage" which the NATO communique established
between a Berlin settlement and movement toward
realization of Moscow's proposal for a conference
on European security (CES). It takes particular
exception, on principle, to attempts to tie the
convening of a CES to other negotiations, including
those "not even related to Europe." The note
stresses Moscow's endorsement of the Finnish pro-
posal for a multilateral preparatory meeting of
ambassadors in Helsinki, and charges that attempts
to establish a Berlin settlement as a precondition
for a CES are meant only to impede movement toward
a conference.
The Russian demarche alleges that further prog-
ress in the Berlin talks is dependent on a change
in the Western position, and insists that "an an-
swer is due from the Western powers" to the pro-
posals presented by the Soviets at the last four-
power meeting. This is essentially similar to the
position the Soviets have long taken privately with
Bonn and more recently in the press, arguing that
Western--and specifically US--inflexibility is re-
sponsible for the stalemate in the talks.
The charge of US hostility and opposition to-
ward detente in Europe reverberates throughout the
note. Moscow charges the US with using the Berlin
talks to "complicate" movement toward a CES and
with attempts to "impede the process of improvement
of the political situation" in Europe.
The general tone of the demarche seems to
reflect a degree of genuine concern that Washington
regards a CES and other East-West negotiations in
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Europe as a threat to its political interest on the
continent, and consequently will try to torpedo
them. The document also serves Moscow's immediate
tactical interests in the Berlin talks by adding
to the pressures for Western concessions.
The West Germans received a similar demarche
on 28 December, and presumably other signatories
of the NATO communique have already been, or will
soon be, on the receiving end of similar notes.
Moscow can be expected to adjust the language of
these notes to try to play on differing approaches
to a CES among the NATO powers and to further its
efforts to undercut the US position in Europe..
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NOTES
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LIBYA-ALGERIA: Libyan President Qadhafi appears
to have experienced a personal defeat during Algerian
Premier Boumediene's state visit, which ended on 30
December. The Libyans had hoped to enlist Algerian
support for the nascent quadripartite federation--
Libya, Egypt, Sudan, and Syria--and to obtain a more
than rhetorical commitment by Boumediene to the
"Qadhafi Plan," which calls for a "battle of destiny"
against Israel. The final communique committed Al-
geria to neither the federation nor the "Qadhafi
Plan" and stressed primarily the value of bilateral
cooperation. This setback is unlikely to deter
Qadhafi in his drive to establish himself as a prin-
cipal Arab leader.
(continued)
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INDIA: Prime Minister Gandhi has told a press
conference that her Ruling Congress Party will form
no countrywide electoral alliances with other par-
ties; it plans to run candidates for all 520 lower
house seats.being contested in the forthcoming elec-
tions. Although her remarks are not encouraging to
the pro-Soviet Communist Party of India, which has
been working for some kind of formal electoral col-
laboration with her party, they do not preclude ad
hoc cooperation in individual contests. Spokesmen
for the right-of-center Opposition Congress Party
have indicated that they will seek cooperative
electoral arrangements with other rightist opposi-
tion parties.
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(continued)
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POLAND: Cardinal Wyszyinski issued a firm,
positive New Year's response to the new government's
initiative for improved church-state relations. The
Cardinal's declaration, read in churches throughout
Poland, roughly parallels the regime's own proposals
for an improvement in the life of Polish citizens,
but goes beyond earlier church statements by listing
specific areas where improvement is needed. Wyszyin-
ski's move indicates he welcomes a church-state ac-
commodation. The contents of his declaration, how-
ever, clearly show his intent to probe the limits
of regime willingness to improve relations
church.
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F
CHILE: Allende has announced that he would
soon send to congress a draft bill to nationalize
all private banks. Inspectors will be appointed to
run each bank, and the government is offering to buy
quickly all of the stock in the banks, paying indi-
vidual stockholders for the first $600 immediately
in redeemable bonds and the remainder over two to
1.5 years. The takeover of foreign branch banks will
be subject to special negotiation. Allende also
promised a new credit policy that would redistribute
credit to the lower classes and lower interest rates.
In the election campaign and afterwards, he fre-
quently pledged to nationalize the banking system.
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(continued)
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BRAZIL: The abductors of the Swiss ambassador
have submitted a new list of 70 prisoners they want
to exchange for the envoy. The list contains 24
names as substitutes for persons the government had
refused to release because they were serving long
prison terms, had participated in kidnapings or other
serious crimes, had declared they did not want to be
exiled, or were not in custody. The authorities will
examine the new list and inform the terrorists within
the next few days whether it is acceptable. The of-
ficials are likely to refuse to free some of the in-
dividuals on the new list because they are serving
prison sentences, thus furthering the government's
prime objective of gaining time to locate the diplo-
mat and his captors before completing an exchange.
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ANDEAN COMMON MARKET: Representatives of this
five-country regional economic grouping have recon-
ciled their differences on the draft code governing
foreign investment, which now must be approved by
their governments. They have agreed that foreign
companies already established in member countries
can retain majority control of their enterprises
but would not be accorded preferential tariff treat-
ment within the common market. Foreign-owned com-
panies established after mid-1971, however, would
have to offer 51 percent of their stock for sale to
common market nationals in Colombia, Peru, and Chile
within 15 years, and within 20 years in Bolivia and
Ecuador. Independent observers of the group's re-
cent deliberations in Lima fear that the restrictive
code could sharply reduce future foreign investment
in the common market.
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