CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019600070001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 15, 2016
• Document Release Date: February 19, 2004
• Sequence Number: 1
• Publication Date: July 28, 1971
• Content Type: REPORT

Approved For Release 2004/03/18 : CIA-RDP79T00975A01960 t7
25X1
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
State Department review completed 28 July 19 71
Approved For Release 2004/03/18 : CIA-RDP79T00975A019600070001-7
 25X1 Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
 Approved For Release 2004/0I1i--DP79T00975A019600070001-7
No. 0179/71
28 July 19 71
Central Intelligence Bulletin
CONTENTS
JAPAN: Sato's difficulties in maintaining LDP
d~ iCS pline. (Page 1)
JAPAN: Policy on foreign penetration of the com-
puter industry. (Page 2)
SOUTH VIETNAM: The campaign against narcotics
smuggling. (Page 3)
USSR-SUDAN: Soviet criticism of the "bloody terror."
(Page 4)
CEYLON: Government concern over the possibility
of renewed insurgency. (Page 5)
CUBA: Fidel Castro's speech. (Page 6)
TURKEY - COMMUNIST CHINA: Diplomatic relations
(Page 7)__
ARGENTINA-CHILE: Presidents meet (Page 7)
VENEZUELA: Nationalization of pharamaceutical
industry (Page 7)
GOLD: Free market price (Page 8)
USSR: Industrial production Page 8)
Approved For Release 2004/Q"P,?k2DP79T00975A019600070001-7
 Approved For Release 2004/03/18 : CIA-RDP79T00975A019600070001-7
SECRET
JAPAN: Prime Minister Sato is having an in-
creasingly difficult time maintaining party disci-
pline.
Only strenuous, last minute efforts by the
ruling Liberal Democratic Party (LDP) leadership
last week succeeded in blocking the introduction of
a resolution in the Diet calling for the immediate
normalization of relations with Peking. The res-
olution was supported by dissident elements in the
LDP and by the opposition parties.
A similar joint effort by dissidents and the
opposition two weeks ago resulted in the defeat of
the LDP's official candidate for speaker of the
Upper House. Together, the actions make it clear
that the Sato government can no longer count on
party discipline to ensure automatic support by
the LDP majority on controversial bills.
The breakdown in discipline results in part
from an awareness by party representatives that
this is Sato's last term and that the succession
struggle is under way. There is, moreover, con-
siderable unhappiness that Sato was caught com-
pletely off guard by President Nixon's initiative
on China. Disharmony within the party is likely
to intensify further in the next few months as
speculation increases over the possibility that
Sato's accumulating troubles will encourage him
to step down early.
28 Jul 71 Central Intelligence Bulletin
25X1
Approved For Release 2004/0 aIQ;RPP79T00975A019600070001-7
 Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
SECRET
JAPAN: The recently announced removal of
barriers to foreign penetration of Japan's com-
puter industry will lead to only limited liberal-
ization.
Minister Kakuei Tanaka, head of the Ministry
of International Trade and Industry (MITI), an-
nounced that imports of some computer equipment
and foreign investment in certain component produc-
tion would be liberalized. These concessions are
largely nullified, however, by the exclusion of
certain key elements of computer systems. Further-
more, investment in major computer equipment will
not be allowed for three years and no plan has been
developed to decontrol increasingly important com-
puter programs.
These exceptions result from intense efforts
by Japanese computer firms and MITI officials to
continue supporting a high level of protection
for the local industry. MITI officials claim it
is unlikely that this plan will be changed signif-
icantly despite Prime Minister Sato's instruction
that further liberalization be considered.
I- I
28 Jul 71 Central Intelligence Bulletin
25X1
Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
SECRET
 Approved For Release 2004/03/18 : CIA-RDP79T00975A019600070001-7
SECRET
SOUTH VIETNAM: The government is evidently
making some progress in its campaign against the
smuggling of narcotics into the country.
In a series of raids last weekend in Saigon
and the delta, National Police confiscated about
345 pounds of opium and 80 pounds of heroin, while
arresting 19 suspected drug smugglers.
The Saigon government launched its antinarcotics
program with great fanfare last month. The effort,
which is to last three months, was undertaken pri-
marily in response to urging from the US, and there
is some question whether the government considers
its vital interests sufficiently at stake to take
politically costly measures against large drug
traders. Despite the sizable quantity of drugs
seized in the raids last weekend, it is not clear
as yet whether those arrested were more than small-
time pushers.
Central Intelligence Bulletin
25X1
25X1
25X1
Approved For Release 2004/03/18 : CIA-RDP79T00975A019600070001-7
SECRET
 Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
SECRET
USSR-SUDAN: Soviet criticism of the campaign
of ^bloocy terror" against the Communists may be
the first step in an effort to prevent further per-
secution of the Sudanese Communist Party.
As reported by TASS, the toughest statement to
date was issued by the USSR Central Trade-Unions
Council on 27 July which "condemned" the execution
of the head of the Sudanese Workers' Union and de-
manded an end to the persecution of trade unionists.
Nevertheless, Moscow's warning does not suggest
immediate countermoves against the Numayri govern-
ment.
The Soviet press has not been friendly to
Numayri's sudden return to power, and Moscow--the
predominant source of Sudanese military assistance--
could put pressure on the General to call off his
reprisals. The scheduled execution today of the
Secretary General of the Sudanese Communist Party
is further evidence that Numayri is unlikely to
discontinue those activities which he bably re-
gards as a strictly internal matter ro 25X1'
Central Intelligence Bulletin
Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
SECRET
 Approved For Release 2004/0 1
DP79T00975A019600070001-7
In't
CEYLON: Government officials are increasingly
concerned-over the possibility of renewed insurgency.
On 26 July, Home Minister Felix Bandaranaike
told a foreign diplomat that an insurgent attack
could.take place within a day or two, possibly
against selected targets in Colombo. He predicted
that the group which attacked the US Embassy in
early March would. be responsible and claimed its
present strength to be 2,500.
Other reports foresee a new wave of violence
beginning in August with the People's Liberation
Front, which was primarily responsible for the in-
surgency last April, again directing the effort.
Posters have begun to appear in north Colombo and.
outlying areas; part of the text appears to be in
code, possibly announcing or giving instructions
for future attacks.
The army commander reports that the government
has stopped releasing insurgents, about 1,200 of
whom had been set free up to 24 July. A substantial
number of those released had returned to their vil-
lages. Some of them threatened the head men of
their respective villages for having supported the
government, and then disappeared into the country-
side. Many detainees are now held near Colombo,
but the government has decided to build new camps
for them at several locations around the island in
order to prevent a poqsible mass breakout and at-
tack on the capital.
28 Jul 71 Central Intelligence Bulletin
25X1
Approved For Release 2004/031(' 4J P79T00975A019600070001-7
 Approved For Release 2004/03/gt 1 P79T00975A019600070001-7
CUBA: Fidel Castro struck a cautiously opti-
mistic note regarding both domestic and foreign
matters in his speech on 26 July.
Castro clearly sees a favorable trend develop-
ing in Latin America. He again lauded the "revolu-
tionary" governments of Chile and Peru and expressed
optimism that in Uruguay, too, a "popular Government"
could be in power following elections late this year.
He also attempted to take advantage of recent state-
ments by some Bolivian officials regarding diplomatic
relations with Cuba, saying that the request of Bo-
livian workers and students for relations with Cuba
"will not find a negative response" on the part of
the Cuban Government. He indicated, however, that
he expected that those involved in the execution
of Che Guevara, some of whom still occupy important
positions in Bolivia, would be dealt with in due
time. In the meantime, he said, every positive
attitude of the Bolivian Government will have Cuba's
support.
In domestic affairs, Castro avoided a repetition
of the bleak economic picture he painted last year at
this time. Although he acknowledged that production
difficulties were continuing in some sectors, he at-
tempted to give a more positive view by presenting
comparative statistics showing an increase in pro-
duction in certain industries during the first quarter
of 1971 over the same period last year. He gave no
indication, however, that Cuba's economic problems
would diminish significantly in the near future.
Regarding Cuba's relations with the US, Castro
said he "will not seek a conciliation of any kind
with the Yankee imperialists." Although he did not
flatly reject all moves toward improved relations,
he said that concessions on his part would be to-
tally unacceptable.
28 Jul 71 Central Intelligence Bulletin
25XI
Approved For Release 2004/04P79T00975A019600070001-7
 Approved For Release 2004/Uff DP79T00975A019600070001-7
TURKEY - COMMUNIST CHINA: Ankara will recognize
Peking early next month, according to Turkish press
reports, but the timing of the ambassadorial exchange
is uncertain. The US Embassy believes that the news
reports were probably leaked by Turkish officials.
Taipei's ambassador in Ankara has asserted that the
Turkish move would cause his government to break dip-
lomatic relations. Turkey would become the ninth
member of NATO to recognize Peking.
* * *
ARGENTINA-CHILE: The presidents of the two coun-
tries met in Salta, Argentina, on 23 and 24 July to
mark the signing of an agreement on arbitration pro-
cedures aimed at resolving the long-standing boundary
dispute in the Beagle Channel. The harmonious and
friendly meeting provided an opportunity for the mili-
tary, Argentine President Lanusse, and the Marxist
Chilean President Allende to size one another up.
Although tensions and mutual suspicions presumably
were not totally absent from the private talks,
Lanusse apparently agreed to a visit to Chile later
this year. The emphasis in the joint declaration on
the principles of nonintervention and "political plu-
ralism" in international affairs is generally being
interpreted in Chile as an Argentine concession and
a victory for Salvador Allende.
VENEZUELA: An opposition political party has
reintro uc edTlegislation to "nationalize" the phar-
maceutical industry, for the most part American-owned.
The bill, originally introduced last year, requires
that Venezuelans own at least 70 percent of every
company. Only firms meeting this rule will receive
licenses to produce basic drugs and be eligible for
government contracts. The growing sense of national-
ism, which has brought about other restrictions on
foreign investment, has increased the chances for
passage of the bill.
(continued)
Central Intelligence Bulletin
25X1
25X1
25X1
Approved For Release 2004/a- i DP79T00975A019600070001-7
'SF
 Approved For Release 2004/0~gHCPUef1DP79T00975A019600070001-7
GOLD: The London free market price of gold
soared over the past two weeks to reach a two-year
high yesterday just under $42 an ounce. This in-
crease stems from the current pervasive uncertainty
in the European foreign exchange markets and a con-
tinuing weakness of the US dollar. The growing pos-
sibility that the mark will float well beyond Septem-
ber, when the float was expected to terminate, and
the recent proliferation of proposals and discussions
for international monetary reform have contributed
to the insecurity of currency speculators. Prospects
are remote for an appreciable drop in the price of
gold, pending a resolution of the internat' nal cur-
rency difficulties.
USSR: The Soviets have announced that indus-
trial production grew by 8.5 percent and labor pro-
ductivity seven percent for the first half of this
year compared with the same period last year. The
rate of growth for industrial production matches that
achieved in the first half of 1970. According to
Soviet calculations all major sectors of industry
turned in respectable performances. The impact of
the Togliatti FIAT plant is reflected in the 44-per-
cent growth in automobile production and the doubling
of new car sales compared with the first half of last
year. The Soviet consumer fared well, although less
spectacularly, in other areas. Retail commodity turn-
over grew by seven percent, and meat production reg-
istered a 16-percent gain, although this reflects a
recovery from the poor results of the last two years.
Central Intelligence Bulletin
25X1
Approved For Release 2004/0,~/Rl.J -VDP79T00975A019600070001-7
 SeCI'troved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7
Secret
Approved For Release 2004/03/18 : CIA-RDP79T00975AO19600070001-7