CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019800060001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 15, 2016
• Document Release Date: February 26, 2004
• Sequence Number: 1
• Publication Date: August 20, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
State Department review completed
N2 42
20 August 1971
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No. 0199/71
20 August 1971
Central Intelligence Bulletin
CONTENTS
ROMANIA-USSR; Unusual party-government meeting. in
Buucharest.. (Page 1)
INTERNATIONAL MONETARY DEVELOPMENTS: Unsolved prob-
1em. Page 2)
BOLIVIA: The coup plot appears to have been thwarted,
at leaast temporarily. (Page 4).
LIBERIA: The True Whig Party has endorsed Tolbert's
hold on the presidency. (Page 5)
MOROCCO: Government moves to upgrade the administra-
t o
(Page 6)
ISRAEL - OCCUPIED TERRITORIES: Resettlement of Gaza
re f ugees. (Page
ARMS CONTROL:, Pressure for a comprehensive nuclear
test ban. (Page 8)
SOUTH VIETNAM: Minh's withdrawal (Page 10)
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PHILIPPINES:. Easing of Christian-Muslim tensions
(Page 11T '
DOMINICAN REPUBLIC: Growing balance-of-payments
deficit Page 12
CENTRAL AMERICA: Uniform fiscal incentives code
Page 12
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ROMANIA-USSR: Party and state chief Ceausescu
convene a highly unusual joint meeting yesterday of
all leading party and government bodies.
Members of the party central committee, Council
of State, and Council of Ministers joined with numer-
ous other national-level officials to hear and endorse
unanimously a report by Premier Maurer on last month's
CEMA meeting in Bucharest and a discourse by Ceausescu
on his Asian tour. Romania's obstructionist tactics
in CEMA and Ceausescu's unrelenting independent stance
in foreign affairs, especially his attitude toward
China, long have been subject to attack from Bucha-
rest's allies. Ceausescu's visit to Peking, however,
particularly raised anxieties and criticism. This
criticism, first raised in Hungary on behalf of Mos-
cow, has since the Crimean summit spread to the prop-
aganda media of other East European capitals.
The timing of the meeting, the day after Soviet
Ambassador Dr.oz.denko called on Ceausescu, causes
yesterday's session to take on special significance.
It is possible that Drozdenko took a threatening
line with Ceausescu. Indeed, Romanian media de-
scribed their talk as "comradely," a term that
implies disagreement.
If Drozdenko adopted a menacing approach on
Wednesday, yesterday's joint meeting could fall in
the category of a defiant reaction. On the other
hand, Ceausescu has in the past been willing to
compromise without sacrificing national interests.
Since late June, however, he'has been particularly
assertive.
At the same time, there continues to be no
evidence of overt military ressure directed against
Romania.
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INTERNATIONAL MONETARY DEVELOPMENTS: The fail-
ure early this morning in Brussels of the European
Communities (EC) Council to agree on a common policy
with respect to the dollar marks a sharp setback to
European unity and sets the stage for chaotic condi-
tions when the exchange markets. open on Monday.
Deep-seated differences--primarily between
France and West :Germany--on setting new parities both
between EC currencies and the dollar and among EC
currencies themselves were strong enough to overcome
a desire on the part of all the Six to preserve Com-
mon Market unity, or even forge a new basis for re-
suming movement toward EC monetary union. The Ger-
mans, intending in any case to maintain the existing
deutschemark float, wanted the Six jointly to float
their currencies with respect to the dollar. France,
adamantly opposed to revaluing the franc, urged the
establishment of a two-tier exchange market, in which
commercial transactions would be carried on with
fixed parities.
Both the proposals for a common float and for
a two-tier market, however, would have required the
Six to establish fixed rates among themselves, and
the better part of the Council session apparently was
taken up with wrangling over how to realign and main-
tain infra-EC parities. Any setting of intra-Commu-
nity rates would have entailed some upward revaluation
of the franc, however. Although ?a Benelux compromise
proposal for,interim, "pivotal," rates gained major-
ity support in the Council, France balked, consider-
ing this tantamount to revaluation of the franc.
An over-all solution now seems. unlikely before
exchange markets reopen next week with each. country
adopting its own arrangements vis-a-vis the dollar.
Although Council chairman Ferrari-Aggradi has urged
the central banks of the Six to intervene on the ex-
change markets in such a way as to keep intra-EC
fluctuations to a minimum, some disturbances of com-
merce and finance are likely and could, if stability
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Cis not soon restored, create serious difficulties
for the Community's agricultural policy--based on
a common unit of account. This will be one of the
pressures, particularly on France, for seeking early
agreement. A communique issued after the Brussels
meeting, however, indicated that the Council would
t a grain until 13 September.
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C BOLIVIA: The Torres government appears to have
thwarte the rightist military and civilian coup
plot, at least temporarily.
Early reports indicated that at least
30 civilians and four military officers were arrested
in La Paz. A series of arrests in the antigovernment
stronghold of Santa Cruz apparently touched off sev-
eral hours of rioting that resulted in one death.
One of the coup leaders may have been arrested and
taken to La Paz. Radio stations in Santa Cruz began
calling for the country to rise against Torres.
In the meantime, Interior Minister Gallardo
declared a national state of emergency and called
on labor and "popular forces" to mobilize to put
down the revolt. The important mine workers' union
at Catavi has mobilized its armed militia to aid
Torres if he should call, according to press reports.
Although the situation is murky, the government
may still have the upper hand. If Torres is able to
control La Paz for several days he may have enough
time to rally needed support. Progovernment civilians
already are patrolling the capital, increasing the
likelihood of violence.
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LIBERIA: President Tolbert's hold on the
presidency for the next four years has been endorsed
by the establishment's political organization.
At a public program this week that was arranged
by True Whig Party leaders, Tolbert announced that
he is to be inaugurated next January as acting
president for a four-year term. He also said that
the special election required by the constitution
to fill the now-vacant vice presidency will not be
held until after he is inaugurated. The program
included a reading of a declaration of loyalty
signed by key party stalwarts.
The term "acting president," which is not
mentioned in the constitution, is contained in a
1955 law cited by Tolbert as the legal basis for
his announcement. Use of this official title is
not likely to dilute Tolbert's actual power and if
it causes him international protocol problems, he
presumably could get the legislature to remove the
word "acting." Tolbert may prefer to serve the
next four and a half years as acting president,
however, in order to ensure his eligibility in 1975
for a full eight-year term as president in his own
right. The delay of the vice presidential election
until after his inauguration will probably strengthen
his hand in promoting his own choice.
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MOROCCO: Under the mandate for reform, the
government is moving with some deliberation toward
upgrading the administration.
On Tuesday, three governors were replaced or
transferred, apparently in an attempt to improve
the functioning of the administration at the pro-
vincial and local level. Mustapha ben Mohamed ben
Larbi Alaoui, one-time member of the now left-wing
opposition party, the National Union of Popular
Forces (UNFP), has been tapped for the key post as
head of the Casablanca prefecture. Alaoui, who has
held several important positions in state-owned
businesses, should be an improvement over hiss
palace-connected predecessor. ore-
over, Casablanca is the traditional stronghold of
mass support for the UNFP, and Alaoui may still
have influential contacts within that organization.
In the other two appointments, an able career
official in provincial administration, Salah Mzily,
moves from governor of El Jadida Province to be-
come governor of politically sensitive Meknes Prov-
ince, where important military installations are
located, and from where most of the army has been
recruited. He succeeds Mohamed Labri el-Fahsi,
who was transferred to Oujda, a politically less
important province on the Algerian border.
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ISRAEL - OCCUPIED TERRITORIES: The Israelis
are continuing to resettle Gaza refugees despite
an Egyptian appeal to the UN.
As of 16 August, the Israelis had moved some
2,000 refugee families from camps in Gaza as part
of a "thinning out" operation designed to improve
security, according to a Ministry of Foreign Af-
fairs official. There is no information on the
exact resettlement locations, but the Israeli min-
ister of transport has said that most of the fam-
ilies have been moved to Al Arish in northern Sinai
some 30 miles from Gaza. Only about 150 persons
are known to have been resettled on the West Bank
so far. Later transfers reportedly will be within
the Gaza area itself. The transport minister claims
that some 2,000 more families are to be moved in
the near future, and the Jerusalem Post has reported
that the military government in Gaza is also working
on longer-range resettlement plans.
Egypt has termed the Israeli action a violation
of human rights conventions, and on 15 August for-
mally appealed to the UN to intervene. The Is-
raelis, however, claim the resettlement is necessary
for security purposes and almost certainl will not
be deterred b the Egyptian complaint.
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ARMS CONTROL: Several non-nuclear states are
pressing or some new initiative toward a comprehen-
sive nuclear test ban (CTB).
The 1963 Limited Test Ban Treaty permits under-
ground testing to continue, but commits the adhering
nuclear powers to seek a formula for a CTB. Negotia-
tions since 1963 repeatedly have foundered on the
superpower deadlock over verification to the distress
of most delegations at the Geneva disarmament talks.
The environmental implications of continued testing
and the possible relationship of a CTB to strategic
arms control have added to the general impatience
over the stalemate caused by the USSR's refusal to
accept the US requirement for on-site inspection.
Earlier this week at the Geneva talks the Japa-
nese delegate said the CTB subject is the "most im-
portant" item on the agenda--a pointed reference to
the view that the draft convention on biological
weapons is a much less meaningful measure. At a
private gathering of several delegations, the Cana-
dian representative was even more forceful and warned
that the superpowers can expect a severe chastising
on the CTB issue at the upcoming UN General Assembly.
Recent speeches by Italy and Pakistan have taken
much the same line.
There are some signs that the Soviets may be
preparing a new CTB initiative which would both re-
spond to this growing criticism and reinforce the
"disarmament offensive" launched by Brezhnev at the
Soviet party congress last March. Soviet Ambassador
Roshchin has said that he hoped to address the issue
in the near future. Judging by his remarks, Moscow
remains uninterested in partial measures, such as
banning tests beyond a threshold defined by the
Richter seismological scale. He has implied, how-
ever, that while the Soviets continue to maintain
that a CTB can be verified by national means, they
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may.be willing to accept an agreement which would be
policed by an international "nuclear detection club"
utilizing seismic data exchanges. Roshchin suggested
that Moscow would not insist that China's participa-
tion be a prerequisite to a CTB accord.
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NOTES
I 'SOUTH'VIETNAM: Big Minh's withdrawal from the
presidential race will add to. the growing opposition
to the government's handling of both'the presidential
and Lower House elections. Minh announced to the
press today that he was withdrawing because of Pres-
ident Thieu's alleged efforts to rig the election.
Although the withdrawal leaves Thieu as the only
candidate in the'3 October election, the President
probably will go through with the contest on sched-
ule, making it a popular referendum on the 'policies
of his government. Nevertheless, the election will
now be discredited in the eyes of many observers
both within Vietnam and abroad. Opposition to the
government's election policies was already increasin
prior to Minh's announcement.
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PHILIPPINES: The government's problems with
Christian-Muslim tensions may have been temporarily
eased as a result of an agreement between President
Marcos and Muslim dissidents who had occupied a
town on the southern island of Mindanao. The agree-
ment, signed on 18 August in Manila, calls for re-
habilitation of the town, which was heavily damaged
in a Philippine Army siege of the dissidents. Marcos
presumably believed the agreement would be politically
'
s
beneficial in demonstrating his administration
concern over the welfare of the Muslim minority in
Mindanao. In the past such agreements have been
short-lived, however. Marcos' determination to fol-
low through on the government side of the bargain
could wane following the off-year elections in Novem-
ber and tensions could again rise.
(continued)
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DOMINICAN REPUBLIC: Central Bank officials are
seeking short-term loans from US banks to finance
the growing balance-of-payments deficit. During the
first half of this year imports soared, but exports
and foreign investment grew more slowly. The gov-
ernment's foreign reserve position is weak, and
President Balaguer is reluctant to place restrictions
on imports for fear of reducing the economy's pro-
jected six-percent growth rate and undermining-'his
political position. Nevertheless, these loans would
only postpone the need for tighter controls, which
probably still will be required, perhaps by the end
of the year.
CENTRAL AMERICA: After eight years of negotia-
tions, Central American Common Market officials have
reached agreement on a uniform fiscal incentives code
for new industries. The code, which becomes effective
next month, sets graduated tariff and tax exemptions
similar to the national law in effect in Honduras but
less liberal than those presently operating in the
other four countries. The uniformity of the regional
code should allow a more rational location of manu-
facturing industries, which up to now has been ad-
versely affected by regional competition for invest-
ment. its failure to include mining, forestry, and
fishing, however, leaves open the danger of continuing
unrestrained intraregional competition for investment
in these areas. Moreover, despite the concession to
Honduras, that country's adherence to the code will
be problematical in view of its virtual withdrawal
from the market since December.
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