CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019000010001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: May 1, 2003
• Sequence Number: 1
• Publication Date: May 7, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N?_ 040
7 May 1971
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No. 0109/71
7 May 1971
Central Intelligence Bulletin
CONTENTS
PAKISTAN: Demands from civilian politicians.
(Page 1)
JORDAN-SYRIA-FEDAYEEN: The two countries are coop-
erating against the guerrillas. (Page 3)
FRANCE-ALGERIA: Both sides evidently are prepared
for a showdown over the oil issue. (Page 4)
UGANDA: Nationalization directive amended. (Page 6)
UN: Fiscal problems. (Page 7)
FRANCE: Planned antiwar demonstrations (Page 8)
COMMUNIST CHINA - MAURITANIA: Credit (Page 8)
CEYLON: Aid consortium meeting (Page 9)
MALTA: Parliamentary elections (Page 9)
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PAKISTAN: The martial law administration,
still attempting to pacify East Pakistan, faces
growing demands for more power from civilian pol-
iticians in West Pakistan.
Z. A. Bhutto--whose Pakistan People's Party
(PPP) won a majority of seats in West Pakistan's
elections for both the national and provincial as-
semblies--has publicly stated that it is "impera-
tive" that political power be transferred to elected
officials, preferably prior to 1 July. The leftist
ex - foreign minister may believe he has to speak
out to forestall radicals who have been trying to
take over the PPP organization in the Punjab, West
Pakistan's most important province. He may also be
trying to stay ahead of politicians from parties to
his right who have asked President Yahya to give
the country a constitution.
The military has allowed the censored Pakistani
press to publish the politicians' statements.
I I senior officers
are divided on giving power to elected officials,
with the "doves" arguing that this should be done
will not turn over power until the situa-
Both sides may well move cautiously. The army
does not want to risk violent agitation in the West
wing which could follow overt action against the
politicians or too long a postponement of civilian
government. For their part, the politicians will
be reluctant to provoke the army into making arrests
or strictly enforcing the current nationwide ban on
political activity.
Nevertheless, violence could break out easily.
In late March, PPP radicals sponsored a general
strike in Lyallpur during which several hundred peo-
ple were injured.
7 May 71 Central. Intelligence Bulletin
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at least in the provincial governments. Yahya has
not made a final decision, but he
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tudents at two universities in the Sind?
the second most populous of West Pakistan's four
provinces--have been demonstrating in support of
East Pakistan for about a week, likening exploita-
7 May 71
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JORDAN-SYRIA-FEDAYEEN: The two countries are
quietly cooperating in attempts to curb Palestine
guerrilla operations along their borders.
Jordanian and Syrian military and civilian
leaders have already met, and future sessions are
being planned.
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Amman believes that the Syrians are sincere in their
efforts to control fedayeen activities. Neverthe-
less, the Jordanians--applying a lesson learned from
the Israelis--are heavily bombarding any area in
Syria from which firing originates, hoping that the
local population will blame the fedayeen and support
a crackdown.
Both countries are also taking steps to curtail
commando operations against Israel.
7 May 71 Central Intelligence Bulletin
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FRANCE-ALGERIA: Both sides evidently are pre-
pared for a showdown over the oil issue.
The talks between company representatives have
not been resumed since France broke off state-to-
state negotiations in mid-April, and moves on both
sides have served to increase pressures. The French
companies have stopped taking Algerian oil and have
sought to organize an international boycott of Al-
gerian petroleum. Prime Minister Boumediene has
warned the Algerian public that the difficulties may
be prolonged, and the government has reportedly or-
dered Algerian state firms not to place any new or-
ders for French products except vital spare parts.
The French companies indicate they are ready
to withdraw from Algeria altogether if they cannot
reach an over-all agreement on future petroleum op-
erations, including oil prices and compensation to
the French oil companies for the controlling inter-
est the government seized last February. The com-
panies apparently have been able to conclude con-
tracts with non-Algerian sources that will cover
all of France's short-term oil needs, and the French
probably can get along in the future on supplies
from other sources. Under present circumstances,
the remaining Algerian threat--to nationalize what
is left of French company assets--does not worry the
companies, because the assets are of no practical
value without an agreement for export of profits.
The Algerians may nonetheless consider it the only
way to break the current impasse and open the way for
agreement on compensation and further sales.
As long as the conflict is confined to the oil
companies, Algeria's immediate concern is to find
new markets for its oil. It is continuing to sell
perhaps as much as a third of its normal production
on the basis of previous contracts. The major in-
ternational oil companies are unlikely to buy the
remaining oil under present conditions. Other pos-
sible sales probably would not fill the gap. If
7 May 71 Central Intelligence Bulletin
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the present conflict continues, Algerian foreign
exchange reserves will probably be adequate to fi-
nance Algerian spending at current levels only through
the end of this year, and the ambitious Algerian in-
dustrial development plan will probably be set back.
Nevertheless, Algeria may be able to obtain some for-
eign financial assistance and seems in any event de-
termined to hold out for some time if necessary.
The French Government is seemingly attempting
to maintain a careful distinction between state-to-
state relations and negotiations between the French
companies and the Algerian state company Sonatrach.
While lending general support to its companies, Paris
is seeking to avoid any action that would cool rela-
tions with Algeria below the level of business-like
objectivity that has replaced the previous special
relationship.
Meanwhile, the Algerian Government has sought
support from its Arab neighbors and from OPEC. Al-
giers may also have inspired the Moroccan King to
attempt to play the role of intermediary. Insofar
as state-to-state relations are involved, France is
likely to restrain its use of further economic
leverage.
7 May 71 Central Intelligence Bulletin 5
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UGANDA: General Amin has amended the previous
regime's nationalization directive that gave the
government control over most foreign-owned companies
operating in Uganda.
Under the new measures, many foreign companies
will be left in private hands. In those cases where
the government is proceeding with nationalization,
the companies will be allowed to hold 51-percent
ownership. Agreements that were already formalized,
which gave the government majority ownership of 60
percent, are to remain in effect unless the companies
ask for a review, in which case renegotiation to al-
low company ownership of 51 percent would be possible.
The government eventually will take over 49-
percent ownership of commercial banks, insurance
companies, and sugar and steel producers, while all
other foreign business activities will stay private.
The government will retain monopoly control over
generation and distribution of power and electricity.
The state-owned Export and Import Corporation, which
previously had been given the authority to acquire
the holdings of all trading firms and to carry on
most of the trade by the government or by semigovern-
ment institutions, may be merged with the National
Trading Corporation, the former dominant quasiaovern-
ment organization in Ugandan commerce.
7 May 71 Central Intelligence Bulletin
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UN: The UN's fiscal problems of several years'
standing are getting worse and may be a key issue
at next fall's session of the General Assembly.
The organization has been in financial diffi-
culty since the early 1960s, when the USSR and
France--two of the largest contributors--refused
to pay assessments for UN peacekeeping operations
in the Congo (K). The sale of bonds, purchased
largely by Western governments other than France,
partially alleviated that problem, but in recent
years the level of assessments has not been suf-
ficient to meet accelerating budgetary commitments.
Some UN officials hope that voluntary contri-
butions of $36 million from the USSR and its allies
and $15 million from France can be obtained. Be-
cause this is unlikely, however, the Norwegian
president of the Assembly, Edvard Hambro, has been
sounding out the major powers on ways to handle
the fiscal crisis and may try to arrange a meeting
of the Big Four delegates on the issue later this
month, another unlikely prospect. Hambro appears
also to have failed to interest bond holders in
the possibility of writing off a part of the face
value as a portion of a settlement of the deficit.
The current cash position of the UN is bad,
and one official in the Secretariat believes that
as early as next month there may not be enough
money on hand to meet the payroll. Various de-
vices can probably be found to tide the organiza-
tion over the summer, but the issue certainly will
be raised early in the fall Assembly meeting. The
major powers, clearly divided over how to pay the
peacekeeping deficit, will have difficulty heading
off the desires of developing countries for another
large increase in the budget to which they contrib-
ute very little, but from which they receive sub-
stantial aid.
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FRANCE: Some 40 organizations, including the
French Communist Party, the Communist-controlled
General Confederation of Labor (CGT), and leftist
student and teacher unions, plan demonstrations
against the war in Vietnam on Saturday and Sunday
throughout France. As in the past, the Communists
are determined to maintain order and discipline.
Moreover, there is no evidence of plans by left
extremists to repeat tactics of organized violence
COMMUNIST CHINA - MAURITANIA: Peking has in-
creased more than fourfold its economic commitment
to Mauritania by extending over $20 million in
credit. It will be used primarily for the construc-
tion of a deep-water port, thereby lessening Mauri-
tania's dependence upon Senegal for harbor facil-
ities. The new aid reflects China's current ef-
forts to expand its influence with underdeveloped
countries, particularly in Africa. Other recent
recipients of major Chinese economic aid in Africa
include Tanzania, Zambia, and Sudan.
(continued)
7 May 71 Central Intelligence Bulletin
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CEYLON: The Western aid consortium, which met
last week in Paris, has recommended that its aid
this year be "somewhat higher" than last year's
level of about $60 million to take account of the
economic losses from the insurgency. Ceylon's
Finance Minister Perera assured the representatives
at the meeting that his government intended to fol-
low through on at least some of the World Bank's
recommended economic reforms. He indicated that
Colombo plans to shift funds away from consumption-
related expenditures to investment in order to ac-
MALTA: Parliamentary elections have been set
for 12-14 June. They are likely to be very close
and the winner will probably have a margin of only
one or two seats, although Prime Minister Borg-
Olivier is confident that his ruling Nationalist
Party will win. The Nationalists will campaign on
a platform that stresses Malta's political stability
and over-all economic growth. The opposition Malta
Labor Party (MLP) and its leader, Dom Mintoff, can
be expected to charge the Nationalists with corrup-
tion and administrative inefficiency. Labor will
also claim that Malta's incipient inflation and
rising national debt are the result of the govern-
ment's financial ineptitude. The MLP's stance on
foreign policy will echo Mintoff's repeated call
for Malta to take a neutral position in the Medi-
terranean.
7 May 71 Central Intelligence Bulletin 9
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