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June 14, 1971
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Approved For Release 2003/08/08: CIA-RDP79T00975A01930SCl'et5 25X1 DIRECTORATE OF INTELLIGENCE Central Intelligence Bulletin Secret N?_ 040 State Dept. review completed Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 25X1 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/ (GJ-R'79T00975A019300020001-5 No. 0141/71 14 June 1971 Central Intelligence Bulletin CONTENTS LAOS: The Bolovens Plateau area was quiet as both sides recovered from last week's heavy fighting. (Page 3) LATIN AMERICA: The "200-mile club" could imperil preparatory work for the 1973 Law of the Sea con- ference. (Page 6) CENTRAL AMERICA: Honduras' new president has adopted a tong stan on regional problems. (Page 8) LIBYA: Premier Qadhafi's latest speech has re- emphiasized Libya's political independence. (Page 9) JAPAN: World Bank bonds (Page 11) INDONESIA EASTERN EUROPE: Debt rescheduling Page 1 CHILE-USSR: Oil plant plans (Page 12) BELGIUM-US: Landing rights controversy (Page 12) SECRET 25X6 25X6 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 25X6 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/9E(Wf?P79T00975A019300020001-5 SECRET Area of maps Government-held location Communist-held location VIETNAM pp a ease - - 11 ,, Approved For Release 2003/0$MIDP79T00975A019300020001-5 LAOS: No major action was reported in the Bolovens Plateau area over the weekend as both sides evidently recover from last week's heavy fighting. Several government units that had been cut off filtered back to friendly lines, but no firm govern- ment casualty figures have yet been reported. It is not clear whether the effort to retake the central portion of the Bolovens will now be postponed in- definitely, although the Communists have also taken heavy losses as improved weather has facilitated US and Laotian air strikes. In the central panhandle, there is some evidence that additional North Vietnamese troops may be pull- ing back from the Dong Hene area. Government ir- regular forces are moving eastward, and some patrols have moved into the outskirts of Dong Hene. Heavy rains are hampering overland movement, however, and it may be some time before government troops can take additional advantage of the reduction of Commu- nist troop strength along Route 9. In north Laos, reinforcements have been moved into the Bouam Long guerrilla base, which has been under heavy pressure for several weeks. Vang Pao's troops are still located on the southern portion of the Plaine des Jarres and have encountered only light enemy resistance. They continue to uncover small enemy supply caches, but have not yet moved toward their primary objective, the high around just west of the Plaine. 14 Jun 71 Central Intelligence Bulletin 3 SECRET Approved For Release 2003/08/08 : CIA-RDP79T00975A019300020001-5 25X1 25X6 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Next 1 Page(s) In Document Exempt Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/>RF2DP79T00975A019300020001-5 LATIN AMERICA: The territorial seas issue is gaining currency in several South American capitals, and the emerging Latin American position could im- peril the preparatory work for the 1973 Law of the Sea conference. Brazil, a recent entrant to the 200-mile club, is actively proselytizing for the 200-mile stand throughout Latin America and has warned all foreign fishing vessels to leave its claimed waters. it hopes to forge a strong united front approach to the scheduled 1973 conference. During a visit to Brazil, Colombian Foreign Minister Vasquez signed a communique that, without recognizing the 200-mile claim, agreed that nations should defend their rights in their respective jurisdictions. Vasquez, in a later interview, also responded to press ac- counts of the US Congress' decision to delay US participation in the International Coffee Agreement because of Brazil's recent claim. He noted-- correctly--that the action will only provoke Latin American solidarity. Uruguay has announced it is undertaking an in- itiative to create an organization for the defense of the 200-mile limits claimed by Argentina, Brazil, and Uruguay. The proposed group would parallel the South Pacific Commission, which Chile, Peru, and Ecuador established in 1952 to coordinate their own 200-mile stand. Peruvian Foreign Minister Mercado has already commented favorably on the Uruguayan plan and indicated Peru will propose a mechanism for permanent coordination between the two groups. Reflecting the already strong views of the Latin American 200-mile claimants, Chilean UN dele- gate Zegers maintains his group will pose serious problems for the superpowers at the July meeting of the UN seabeds committee, which is making prep- arations for the 1973 conference. He asserts that if the Latin Americans are not permitted to chair 14 Jun 71 Central Intelligence Bulletin SECRET Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/(WC ['P79T00975A019300020001-5 the subcommittee charged with recommending terri- torial waters limits, they will seek priority con- sideration of an international maritime organiza- tion, a concept that deeply troubles the USSR. More- over, the US would be confronted with discussion of "peaceful uses" of the ocean--a delicate subject that includes intelligence-gathering activities. The Latin Americans could thus promote a disruptive July session that would lead to postponement of the 1973 conference, and thereby afford them more time 14 Jun 71 Central Intelligence Bulletin SECRET 25X1 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/08/6E41i11J'P79T00975A019300020001-5 CENTRAL AMERICA: The newly inaugurated presi- dent of Honduras, Ramon Cruz, has adopted a tough and seemingly inflexible stance on regional problems. Cruz has stated categorically that he will not consider Central American Common Market issues until the border dispute with El Salvador is resolved. Moreover, he has indicated his preference for an in- ternational judicial settlement, possibly through the OAS or the International Court of Justice, rather than bilateral negotiations. Because El Salvador has a weaker legal case, it is not enthu- siastic about border discussions in general, however, and would be opposed to international arbitration. Past efforts to solve bilateral and Common Market problems appear to have foundered because too narrow an approach was taken and possible trade- offs were thereby precluded. Cruz may be falling into the same trap with his stress on a single issue and on a "legal" rather than a "political" settle- ment. Unless a new sense of realism is developed soon, the beginnings of the Salvadoran election campaign next month will further erode chances for an agreement before 1972. 14 Jun 71 Central Intelligence Bulletin SECRET 25X1 Approve 0 r a ease - - Approved For Release 2003foEfaR(B'RDP79T00975A019300020001-5 LIBYA: Premier Qadhafi's latest speech, which blaster great powers and Arab states alike, has re- inforced Libya's independent political stance. The speech on 11 June--the first anniversary of the US evacuation of Wheelus Airbase--was tai- lored to the local audience and directed against US policies. Qadhafi raked up the well-worn threat that relations cannot continue if the US "scorns Arab interests" and pursues its policy of supplying arms to Israel. A new and perhaps ominous note was sounded by his reference to "the course of action" that the Libyan people will want to take against the US. To date, US interests--primarily oil com- panies--have survived under Libya's strongly held concept of nonalignment. As Qadhafi's sense of impotence in Arab politics grows, however, his mounting frustration may well find a convenient out- let in some anti-US gesture. The two positive aspects of the speech--the offer of diplomatic recognition to Communist China and the announcement of the future formation of the Arab Socialist Union (ASU) as Libya's sole polit- ical organization--fell somewhat flat. The back- handed recognition of Communist China was cast in uncomplimentary language and there is no evidence of official contacts prior to the speech. Peking radio reported the recognition offer without com- ment, but the Chinese probably will take diplomatic soundings now to discover what Libya has in mind. The ASU, which Qadhafi had promised earlier as a means to develop popular participation in policy- making, presumably will be as much a rubber stamp as its counterpart in Egypt. The Premier also dealt harshly with the Soviet Union, associating it with a potential threat of imperialist domination of Arab countries and boast- ing that only Soviet diplomatic personnel were resi- dent in Libya. Libyan friendship with the USSR re- mains dependent upon Moscow's dealing with Arab 14 Jun 71 Central Intelligence Bulletin 9 SECRET Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/Q 8`J fRDP79T00975A019300020001-5 nations as equals, he said. Egypt was implicitly criticized for its recent treaty with the USSR which, Qadhafi intimated, commits Cairo to live under Soviet influence. Relations with the British might still be worked out, Qadhafi said, if they withdraw quickly from the Persian Gulf and settle the current arms contracts squabble with Libya. France alone of the great powers was not mentioned. Lesser Arab states-- especially Jordan--were castigated for their laxness in pursuing the Libyan goal of pan-Arab unity. 14 Jun 71 Central Intelligence Bulletin SECRET 25X1 Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Approved For Release 2003/0 ?$~ I ,F .DP79T00975A019300020001-5 JAPAN: The government has agreed that World Bank bonds worth $30 million may be sold in the Tokyo money market for the first time. In addition, Japan soon will make a direct $20-million loan to the bank, bringing such extensions to the bank dur- ing the. past two years to nearly $600 million. These transactions increase Japan's capital out- flows, thereby somewhat relieving foreign pressure to reduce balance-of-payments surpluses without re- sorting to less popular trade liberalization meas- ures or revaluation of the yen. INDONESIA EASTERN EUROPE: Indonesian Foreign Minister Ma .ik as successful-ly` concluded agreements, mainly on Indonesia's terms, to reschedule debt pay- ments totaling over $240 million to East Germany, Hungary, Czechoslovakia, and Poland. Although terms have not been made known in every case, it is likely that in all cases they conform to the agreement al- ready arrived at with the USSR, which accounts for more than a third of the $1.6 billion owed in total principal. This agreement provides for a 30-year repayment period for principal covering all short-, medium-, and long-term debt, and repayment of con- tractual interest over a 15-year period beginning in 1985. The East European willingness to accept Djakarta's terms presumably was based on the realiza- tion that payment on Indonesia's terms is better than no payment at all. (continued) 14 Jun 71 Central Intelligence.Bulletin 11 SECRET Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 25X1 25X1 Approved For Release 2003/0"RIBTDP79T00975A019300020001-5 CHILE-USSR: The Chilean National Petroleum Enterprise (SNAP) is going ahead with plans to build a lubricating base oil plant financed largely by a long-standing $42-million Soviet credit. ENAP plan- ning and engineering specialists.are now in the USSR discussing the project, and a Soviet group is sched- uled to visit Chile in the near future to begin a feasibility study. The plant, which will take two to three years to build, will be Chile's first for the manufacture of lubricating base oils. Such base oils are currently imported into Chile by US com- panies for formulation into finished lubricants i their own plants. F77 I BELGIUM-US: The long-smoldering Belgian re- sentment over unwillingness of the US to grant landing rights in Chicago to Sabena Airlines has finally culminated in a retaliatory move. Belgium's Ministry of Communications announced the abrogation, beginning in October 1972, of the civil air agree- ment that permits reciprocal landing rights in Brus- sels and New York for airlines of the two countries. Although partially designed to assuage domestic criticism of governmental inaction, the Belgian tac- tic probably aims mainly at providing leverage for a change of US policy. Central Intelligence Bulletin SECRET 25X1 25X1 Approved For Release 2003/08/08 : CIA-RDP79T00975A019300020001-5 $ec roved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5 Secret Approved For Release 2003/08/08 : CIA-RDP79T00975AO19300020001-5