CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A018600030001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: March 7, 2003
• Sequence Number: 1
• Publication Date: March 23, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N'~ 4 0
23 March 1971
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No. 0070/71
23 March 1971
Central Intelligence Bulletin
CONTENT S
LAOS: The government is moving to stabilize the
situation around Luang Prabang. (Page 1)
COMMUNIST CHINA - JAPAI~T: Peking appears to be soft-
ening its attitude on Sino-Japanese problems.
(Page 2)
ARAB FEDERATION: A formal union reportedly is to
be announce next Sunday. (Page 4)
SWEDEN: The government will not seek full member-
ss tin the EC . ( Page 5 )
TANZANIA: Restrictions have been imposed on capital
tra-"ns~ers. (Page 6)
USSR-JAPAN: Communist parties (Page 7)
PAKISTAN: National Assembly postponed (Page 7)
TURKEY: Political situation (Page 8)
AUSTRALIA: New cabinet (Page 8)
USSR-INDONESIA: Military spare parts (Page 9)
CHILE: Possible plotting (Page 9)
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LAOS:.. The government is taking .steps to sta-
bilize the situation around Luang Prabang.
Prime Minister Souvanna Phouma and Defense
Minister Sisouk visited. the royal capital yesterday.
Sisouk later said he thinks the situation there has
stabilized, but he was dismayed that government
units-north and northeast of the town had-fled in
the face of what he be1~_eved were, only some 300-400
enemy attackers.
Sisouk was clearly displeased with the perform-
ance.of military leaders in Military Region 1, and
he has ordered two gener_a1s and several other of-
ficers from the general staff to move to Luang
Prabang to assume control of all tactical opera-
tions in the region.- The regional commander, who
is the King's brother,-and his staff will remain in
place, however. General Van.g Pao, commander of
Military Region 2, also visited Luang Prabang and
subsequently ordered some '400 irregulars from his
region to reinforce the town.
King Savang is taking an active role in planning
new government military moves; he has ordered govern-
ment units .to recapture the positions nearest the
airfieldat once. The King canceled his traditional
appearance at Army Day in Vientiane yesterday in
order to remain in Luang Prabang. His continued
presence. there should have a beneficial effect on
the town"s citizenry, who believe his presence af-
fords the town itself military immunity
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COMMUNIST CHINA - JAPAN; Peking appears to be
softening its rigi att~.tu a of the last few years
on Sino-Japanese problems.
Premier C ou En-lai
remarked that Japanese Government leaders are welcome
to visit China at any time, singling out the "present
prime minister and foreign minister." Chou's state-
ment stands in marked contrast to Peking's public
posture of irreconcilable hostility toward the Sato
government. Chou can hardly expect this gesture to
be acted on, but his remarks suggest that Peking might
be prepared for the first time to deal with Sato if
it thought there was an opportunity far a significant
exchange on key bilateral issues.
The most important of these issues appears to
be Tokyo's relations with Taiwan. Peking's new flex-
ibility is probably designed to forestall the possi-
bility that, as a result of its large. economic stake
in the island, Japan will supplement or replace the
US as the "protector" of the Nationalist regime.
Peking recently underlined its concern on this issue
when in a restatement of its "conditions" for the
establishment of Sino-Japanese diglamatc relations
it included for the first time a demand that Tokyo
abrogate the Japan-Taiwan peace treaty of 1950.
In practice, however, even this demand may be
softer than it appears on the surface.
au n- ai recen y encourage a v~s~ o many
more "leftist" businessmen to China and immediately
defined as leftist anyone who "visualized" severing
relations with Taipei. This formulation, a major
change from Peking's previous definition, is clearly
meant to suggest to Japanese business circles that
Chinese markets wi11 prove more fruitful than those
in Taiwan.
(continued}
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In putting forward these new ideas, Peking may
also have in mind short-term considerations involving
some way of influencing Japan's position on this year's
UN vote and exploiting possible tensions on the issue
among Tokyo, Taipei, and Washington.
In contrast to its generally conciliatory at-
titude, Peking has in the past year maintained a
rigid attitude toward Japan. This approach has nei-
ther undercut the Sato government nor appreciably
arrested a drift toward a "one China, one Taiwan"
. policy in Tokyo, Chou's recent remarks suggest that
Peking is now considering substituting honey for
2 3 Mar 71 Central Intell%gence Bulletin
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ARAB FEDERATION.: The. formal four-state union,
which press reports say is to be announced next Sun-
day, is probably regarded by Egyptian President Sadat
as primarily a device to maintain Arab support for
Cairo's policy of negotiation..
According to a fairly reliable Beirut newspaper,
a union bringing together Egypt, Syria, Libya, and
the Sudan will be established if Libyan-Sudanese
differences can be resolved. Failing this, a three-
state union, excluding the Sudan, will be formed.
The decision to proceed with the formal union
may have been confirms d during Fresident Sadat's un-
announced one-day trip to Zibya last week. Sadat
is fully aware of the popular opposition to the fed-
eration in both Libya and the Sudan, and of Egypt's
unhappy union experience with Syria from 1958 to
1963. He has heretofore resisted Libyan Premier
gadhafi's insistent calls for rapid movement toward
unification. He may now believe, however, that the
time has come to present at least the facade of an
Arab united front during the current delicate phase
of the Middle East peace negotiations.
Sadat may also hope that Syria's accession to
the grouping will. generate domestic support far Asad
as well as backing within the Syrian leadership for
Cairo's stand in the Arab-Israeli negotiations. The
Sudanese position on joining the union is still un-
clear. Since last November, President Numayri, mov-
ing cautiously on an issue unpopular in the Sudan,
has insisted on a protracted timetable for formal
union. His position has been the subject of some
bitter exchanges with Qadhafi.
Despite the broad scope of the planned merger--
reportedly to encompass defense, foreign, and eco-
nomic affairs--it seems highly unlikely that effec-
tive supranational political integration will be
achieved soon, if ever,. While disCUSSlons tan uni-
fication in a number of fields have been under way
for more than a year, little tangible progress has
et been made toward im lementin
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SWEDEN': The government has. formally announced
that it w 11 not seek full membership in the European
Communities (EC).
The reason given for this decision is that for-
eign policy cooperation among the Six and the pro-
jected economic and manetary union would threaten.
national decision-making powers in key areas and
would therefore be incompatible with Swedish neu-
trality. The announcement is generally recognized
as having little practical significance, because
the neutrality reservations Sweden attached to its
renewed approach to the EC last November virtually
precluded membership. Subsequent critical comments
by Swedish officials on EC moves in the foreign
policy and monetary areas underlined the basic in-
compatibility.
The official objeci~ive in regard to the EC has
thus been redefined as participation in a customs
union comprising both industrial and agricultural
goods, with special insi~itutional forms of coopera-
tion corresponding to the scope and nature of Swedish
obligations. Fully aware that the EC is not at all
sympathetic to a mere customs union arrangement,
which has been derided as conferring all the benefits
and requiring none of the responsibilities of member-
ship, the Swedes would accept the creation of a free
trade area for industrial products, with special ar-
rangements in agriculture and some coordination in
other sectors.
Though not a surprise, the government's announce-
ment has been played to shore up Prime Minister Palme's
sagging popularity, as well as remove the EC member-
ship issue as a target for left-wing sniping. It has
also provided the government with an opportunity to
point up the disunity among the three bourgeois op-
position parties on this issue. The Center Party
reacted by fully endorsing the government decision;
the Liberals equivocated, but finally subscribed re-
luctantly; and the conservative Moderate Coalition
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criticized the decision as premature.
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TANZANIAN The government, faced with financial
problems, as imposed restrictions on capital trans-
fers to its East African Community (EAC) partners,
Kenya and Uganda.
It also has banned all exports of Tanzanian cur-
rency except for payments for legitimate trade.
Zast year Tanzania's leakage of capital to Kenya
was reportedly $14 million more than in 1969, causing
Tanzania to make a substantial cutback in planned
development expenditures for 1971. Reserves cur-
rently available to Tanzania stand at about $66 mil-
lion, or just about equivalent to four months of im-
ports at 1969 levels,
The EAC is a limited common market and operates
services such as air and rail transportation for the
three members, The treaty, signed in 196?, does not
prevent exchange controls from being exercised by
each country, but it does require those countries
to permit alI bona fide current account payments
without undue delay. Tanzania appears to be abiding
by the letter of the treaty, but the spirit of the
treaty, which has suffered of late, especially since
the recent. coup in Uganda, may be further tarnished
by this move,
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U55R-JAPANe The Soviet and Japanese Communist
parties ave ecided to mute their long-standing
quarrel as a result of consultations in Moscow. In
return for a decision by the Japanese party to send
a delegation to the upcoming Soviet party congress,
Moscow apparently has pledged to cease its support
for a pro-Soviet Japanese Communist splinter group.
The parties apparently did not reconcile their con-
flicting ideological views on such issues as the So-
viet invasion of Czechoslovakia and the U55R's re-
tention of the Japanese-claimed "Northern Terri-
tories, but the wording of their joint communique
suggests they have agreed to keep their differences
private. The presence of the important Japanese Com-
munist Party at the Soviet party congress would be
a significant gain for Moscow and may redound to the
political credit of Soviet. politburo member Suslov,
who apparently was instrumental in easing the
strained relations.
PAKI5TANe President Yahya, after a meeting
with Z.Z. Ao Bhutto of West Pakistan and East Paki-
stani leader Mujibur Rahman, has postponed the Na-
tional Assembly. It had been scheduled to convene
on 25 March to begin writing a new constitution, but
all parties have apparently decided that more time
is needed. for negotiations, With Mujib's prior ap-
proval of the postponement, it seems unlikely there
will. be a repetition of the violence that followed
Yahyaes, earlier postponement of the assembly on 1
Marcho
Central Intelligence Bullet~tn
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TURKEY: The political situation remains in a
state o~~ux pending the formation of a new cabinet
and the adoption of an approved program. Prime minis-
ter - designate Erim should be able to put together
an aeceptablecoalition government, howeve r, now
that he has received pledges of su~gort-from both
major parties. Erim reportedly intends. to select.
up to half of his cabinet ministers from among in-
dependents and from outside Parliament. If Erim is
unsuccessful, the threat of an ultimate military
take-over persists, and many Turkish political ob -
servers view Erim as "a last chance." Although the
nationwide military alert has been relaxed, security
precautions in some areas h een tight-
ened~ ,
AUSTRAi~IA: ,.Prime Mirtistex W~1~.iam~,Mc~+tahQ~!
Li}~gr,a~quntry cak~iriet, which was installed yester-
day, has a more conse;rvati.ve appearance than the
former government, but policy should rernain_un-,
changed. Billy Sneclden, the new treasurer,iand John
Gorton, now defense minister, are likely to be the
strongest individuals .and politically the most ef-
fective i,n the cabinet. Fozeign .Ni1niste~ Busy, al-
thoug~ -able, lacksj,~lar and ~orceful}~ess, and it,
seems. likely, that McMahon himself will -keep. a chose
hare. ~~ fcare~,gn ,policy,. .Although McMahan. ?-psis~,~. ,
-his eabipet wild sezve cut .the ~e~tn ,wh~.c#~ ends. in
Ngvember 19?72., tha government's present heightened
popularty,could,induce him: to call elections within
continued)
2 3 Mar 71 Central Intelltg~nce Butdetsn
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USSR-INDONESIA: The Indonesian foreign minis-
ter has announced that Moscow has finally agreed to
provide spare parts fo.r the air force and navy on
credit, according to a press report. Since 1967
Indonesia has purchased almost $5 million worth of
spares from Moscow under a $10-million cash agree-
ment, but Djakarta had been trying to get the re-
mainder converted to a credit basis. The agreement
is unlikely to lead to a more comprehensive military
aid program and the equipment will. do little more
than delay the deterioration of Soviet materiel in
Djakarta's inventories. In an economy move, Indo-
nesia's air force and navy had cannibalized some
Soviet equipment and sold it for scrap.
CHILE: A number of junior and middle grade of-
ficers~-all branches of the armed forces are re-
ported to have formed a clandestine Revolutionary
Committee (CR) and may be plotting a coup at the
time of the municipal elections of 4 April. Several
reports indicate that civilian as well as military
members of the CR are supporters of dissident re-
tired general Roberto Viaux; there is no real na-
tional leadership. The realization of CR members
that most top military commanders have reached an
accommodation with the President may influence the
malcontents to aim a.t changes in the government
rather than its overthrow, Their chances of success-
fully pressuring the government seem poor at this
time.
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