CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019000050001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 14, 2016
• Document Release Date: July 28, 2003
• Sequence Number: 1
• Publication Date: May 12, 1971
• Content Type: REPORT

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't5
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 040
12 May 197].
State Department review completed
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No. 0113/71
12 May 1971
Central Intelligence Bulletin
CONTENTS
ROMANIA: Ceausescu has strongly reasserted his
country's independent foreign policy. (Page 1)
YUGOSLAVIA: Possible purge in the Croatian Republic.
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AUSTRALIA - COMMUNIST CHINA: The Australian Govern-
ment is taking a more accommodating public position
on relations with Peking. (Page 4)
PANAMA: The government is seeking to embarrass the
US. .(Page 5)
INTERNATIONAL MONETARY SITUATION: A breathing space
has been prove a Page
UN: Impasse on guidelines for peacekeeping. (Page 8)
ARGENTINA: Coup plot thwarted (Page 9)
PAKISTAN-INDIA: Dispute over repatriation of diplo-
mats Page
CHILE: Pressure on opposition media (Page 10)
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ROMANIA: Party leader Ceausescu has strongly
reasserted his country's independent foreign policy,
in terms which suggest renewed inter-party squabbling
with the Soviets.
At the Romanian party's 50th anniversary cele-
brations last week, Ceausescu elaborated on the blunt,
nationalistic statement he made at the Soviet party
congress last month. He flatly rejected the idea
that the Communist world movement should be directed
from Moscow, and insisted that there is no contradic-
tion between Romania's pursuit of national interests
and the preservation of international socialist unity.
Ceausescu also implicitly reaffirmed his criticism
of the Soviet intervention in Czechoslovakia in 1968.
Ceausescu specifically disputed recent Western
press allegations that Romania is backing away from
its nationalistic stance. To quell doubts on this
score, Ceausescu asserted that the principles of
independence are as essential to Romania as air is
to life.
In statements which are sure to irritate Moscow,
Ceausescu reasserted contentious issues that have
been dormant in past months, and frequently praised
the Chinese Communists. He consistently downgraded
the USSR's contribution to the building of socialism
in Romania, which has been the theme of Moscow's
sparse commentary on the anniversary. His reference
to the necessity for strengthening party unity sug-
gests that he still fears that the Soviets might try
to cultivate ultraconservative elements of the Ro-
manian party.
Although Ceausescu is known to prefer regular
consultations to iron out problems with the Soviet
leaders, the two sides have not met in recent months.
Brezhnev apparently did not hold private discussions
with Ceausescu during the Soviet party congress, nor
did the two meet when Brezhnev made a brief, late-
night stopover in Bucharest en route to Sofia to
attend the Bulgarian party congress in mid-April.
12 May 71
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YUGOSLAVIA: The Croatian Republic party is
threatening a purge of "opposition elements."
On Monday the Croatian party's commission on
ideology and organization sharply attacked separatists
who want to break up the Yugoslav federation, and
also recommended a purge of dissidents from the party.
The commission also reported that 20,000 party mem-
bers, mostly workers, had left the party in the last
two years because of ideological confusion. and pro-
liferating factionalism. Certain party members were
also condemned for pushing a closer relationship be-
tween the party and the Catholic church. The com-
mission made it plain that, although religion and
the party could coexist in Yugoslavia, simultaneous
party membership and church allegiance are untenable.
The Croatian central committee is to convene on
Thursday and the commission's recommendations will
be taken up then. The Croatian plenary session was
called following consultations two weeks ago between
local party leaders and President Tito.
Over the past weekend, President Tito repeated
his call for purification of the party and firmly
rejected allegations that he was bluffing to bring
the opposition into line. This demonstration of
resolution probably was calculated to convince the
Croatians that they have to take immediate and con-
crete steps to resolve their internAl roblems.
12 May 71 Central Intelligence Bulletin
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AUSTRALIA - COMMUNIST CHINA: The political
opposition's initiative on re ations with China has
forced the Australian Government into a more accom-
modating public position.
Prime Minister McMahon reacted within hours to
dilute the effect of Labor Party parliamentary leader
Whitlam's announcement yesterday that Chinese per-
mission had been received for a Labor delegation to
visit Peking in June. McMahon stated that--in view
of Peking's apparent receptivity to wider contacts--
government efforts will be undertaken to open a
"dialogue" which could lead to attainment of a long-
term objective of normalizing relations with the
mainland. McMahon asserted that Peking's record of
subversion dictated caution and emphasized that no
steps would be taken that would prejudice Australia's
relations with the Republic of China.
Whitlam's planned Peking venture is an attempt
to capitalize on domestic disappointment.over Pe-
king's rejection of wheat purchases from Australia
this year. In an effort to create pressure for rec-
ognition in Australia, the Chinese told Australian
Wheat Board members last month that henceforth pur-
chases would-be made only from "friendly" states.
Loss of the Chinese market, which accounted for
about 30 percent of Australian wheat exports last
year, prompted a worried reaction from Australian
farmers, whose support is important to the Liberal-
Country coalition government.
It has been the Labor Party's policy to recog-
nize Communist China. Although the government prob-
ably wishes to undercut the Labor Party's initia-
tive, it will probably not be hurried into recogni-
tion of Peking or changes in its UN position
12 May 71 Central Intelligence Bulletin
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PANAMA: The government, while taking steps to
protect itself against coup plotting, is seeking to
embarrass the US by granting political asylum to US
servicemen.
Torrijos has blamed the US for previous coup
attempts and has resented his opponents'use of the
Zone as a safe haven. In an obvious slap at the US
for granting asylum to plotters on previous occa-
sions, and possibly to forestall such action in the
future, the government has granted asylum to two
soldiers who escaped from a US military stockade in
the Zone and to an airman under investigation for
larceny. In addition, the Panamanians have arrested
two US soldiers accused of attempting to kidnap the
asylees.
The current Panamanian moves appear, however,
to be part of a larger plan to present a more left-
ist, nationalistic image. Under tight budgetary
constraints and apparently convinced that a new canal
treaty with the attendant economic advantages would
not be possible this year, the government seems to
hope that an upsurge in revolutionary rhetoric and
political mobilization will distract attention from
any downturn in economic activity and employment.
Torrijos, with the assistance of the Communist
Party, may seek therefore to focus popular attention
outward, channeling discontent against the US and in
support of government efforts to gain full jurisdic-
tion over the Canal Zone.
12 May 71 Central Intelligence Bulletin
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INTERNATIONAL MONETARY SITUATION: Measures in-
stituted by several European governments over the
weekend appear to have provided a breathing space
for more considered action.
Foreign exchange markets have been relatively
quiet. The Deutschemark and the Dutch guilder sta-
bilized around two or three percent above the old
dollar parities. In London, demand. for dollars in-
creased as speculators, apparently unwilling as yet
to unload marks and guilders, sold pounds to buy
dollars needed to cover transactions made last week
and due this week. In addition, there probably was
some movement from sterling directly into marks and
into Eurodollars, which pay a higher interest rate.
Consequently, sterling yesterday hit its lowest
point in weeks.
Although it seems likely that both Bonn and
The Hague will permit their currencies to float for
some time, they will probably come under increasing
pressure to adopt fixed rates again as the situation
stabilizes. In moves which could serve to shorten
the period of floating, Bonn has banned interest
payments on foreign deposits and will require com-
mercial banks to obtain licenses for any such de-
posits above 50,000 marks. These steps are intended
to shield Germany from massive capital inflows at
such time as the float ends.
Some of the early political fallout from the
crisis is now evident. With varying degrees of
feeling, most Europeans hold the US basically re-
sponsible for the crisis. At a meeting with Ambas-
sador Schaetzel on Monday, EC Commissioner Barre in
effect predicted dire consequences for US-European
relations should there be any intimation from Wash-
ington that the US is benefiting from the difficul-
ties the crisis has caused the Common Market.
(continued)
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Within the community, it is now widely assumed
that Paris is concerned about the pre-eminence which
the mark has achieved.
Pompidou person cz e on France's
abstention from further work on EC monetary union,
while the floats are in effect, in order to sh
(French displeasure over tlip German action.
Paris will as a result
more eager to facilitate British accession. At
the same time, however, the French may also strengthen
their insistence that steps be taken to assure that
sterling not achieve the role of the community's
reserve currency. Sterling's future is likely to
b
e one of the main themes of Pompidou's meeting
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UN: The lengthy impasse over the development
of new guidelines for UN peacekeeping missions shows
no sign of being quickly resolved.
At the meeting last week of the.committee set
up to consider this problem, Ambassador Malik pro-
voked a bitter debate, alleging that the US is solely
responsible for preventing agreement. In response to
US questions, Malik gave no indication when--if ever--
Moscow intends to respond to the US proposals which
were submitted for its consideration months ago.
Principally at issue is the Soviet reluctance
to accord any degree of latitude to a secretary gen-
eral in controlling a peacekeeping mission. Although
Moscow has given no sign of any give on this question,
it may also be delaying any response because it is
reluctant to take a position on the general question
of peacekeeping arrangements while discussion of the
four-power guarantees for any Middle East solution
is still going on.
Although the smaller powers have heretofore
waited patiently for the big powers to try to re-
solve their differences, their comments at last
week's meeting suggest that they may intend in the
future to intervene more actively. The Brazilian
delegate advocated greater "collective responsibil-
ity" by the smaller powers in the absence of a
superpower accord, and his Yugoslav counterpart
termed leaving the matter to the US and the USSR
"impermissible." Most members feel much greater
efforts should be made to achieve agreements on at
least interim steps. A Canadian official has told
the US that Ottawa may offer a compromise proposal
on peacekeeping operational responsibility, and
that a further delay in progress could lead to
Canada's withdrawal from the committee,
12 May 71
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NOTES
ARGENTINA: Government forces moved last night
to thwart a plot by extreme nationalist military
officers aimed at ousting President Lanusse. Accord-
ing to press reports an arrest order was issued for
retired General Labanca, and several colonels be-
lieved to be involved. were arrested. The conspira-
tors were primarily opposed. to President Lanusse's
plan to hold elections within three years and to
negotiate with followers of former dictator Juan
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PAKISTAN-INDIA : Both countries have accepted
Swiss good offices in their dispute over the repa-
triation of diplomatic personnel in Dacca and Cal-
cutta. Pakistan has refused to allow the repatria-
tion of the Indians unless Deputy High Commissioner
Masud--a West Pakistani--is allowed to interview in-
dividually each East Bengali defector from the mis-
sion in Calcutta. The Bengalis, however, insist that
they will come only as a group to see Masud. The
presence of a Swiss diplomat at individual meetings
has been suggested as a way around the impasse.
(continued)
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CHILE: Government pressure continues to mount
against opposition news media, particularly radio
and television. The ruling Popular Unity coalition
is demanding the cancellation of a popular television
discussion show dominated by Christian Democratic
and National Party spokesmen. In addition, the sta-
tus of a large Christian Democratic radio network re-
mains in doubt following a government decision to
transfer the broadcasting concession to the country's
only labor confederation, which is dominated by the
Communists and Socialists. Communist columnist
Eduardo Labarca, coordinator of the newly created
Leftist Journalists' Organization, has revealed that
a congress of Latin American -journalists will be held
in Santiago in September.
12 May 71
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