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December 14, 2016
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March 27, 2003
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September 4, 1971
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Approved For Release 2003/05/19: CIA-RDP79T00975A019900g 25X1 DIRECTORATE OF INTELLIGENCE Central Intelligence .Bulletin Secret N?_ 42 4 September 1971 Approved For Release 2003/05/19 : CIA-RDP79T00975A019900080001-3 25X1 Approved For Release 2003/05/19 : CIA-RDP79T00975AO19900080001-3 Approved For Release 2003/05/19 : CIA-RDP79T00975AO19900080001-3 Approved For Release 2003/06! RJE-'DP79T00975A019900080001-3 No. 0212/71 4 September 1971 Central Intelligence Bulletin CONTENTS SOUTH VIETNAM: Ky threatens. (Page 1) USSR--CHINA: Pravda attack on Peking. (Page 2) INTERNATIONAL MONETARY DEVELOPMENTS: Europeans increasingly favor rise in gold price. (Page 4) CHILE-USSR: Military mission in Moscow. (Page 6) Problems facing Banzer. (Page 7) URUGUAY: Violence and extremism mark campaign. (Page 8) MALAGASY REPUBLIC: Nominating convention. (Page 10) IRAQ: Assassination attempt (Page 12) Approved For Release 2003/Q ,1"DP79T00975A019900080001-3 Approved For Release 2003/05/I .,6*j pP79T00975A019900080001-3 SOUTH VIETNAM: Vice President Ky's public threat to use force to oust President Thieu.seems to be part of his campaign to force the President to change his election plans. Ky told members of the foreign press corps yes- terday that he would destroy Thieu and "his clique" even if the vice president had to sacrifice his life to do it. Ky asserted that there is great unrest among the people and the armed forces, and questioned the loyalty of many generals to Thieu. The vice president gave his threat a sense of immediacy by claiming that many unpredictable events could take place, "perhaps tonight or tomorrow." Ky has attacked Thieu in strong terms in the past, but his latest remarks go much further and virtually threaten a coup attempt. He clearly is genuinely angry and is trying to generate more posi- tive opposition to Thieu. He still seems to lack significant military support, however, and he would be unlikely to disclose his intention publicly if he really planned to take military action. One of the vice president's chief political lieutenants is currently in the US, and Ky's remarks may have been intended partly for US consumption. He may hope that by further aggravating the South Vietnamese political climate, he can influence.the US to per- suade Thieu to postpone and reorganize the residen- tial election. 4 Sep 71 Central Intelligence Bulletin 25X1 Approved For Release 2003/0gEUMP fZDP79T00975A019900080001-3 Approved For Release 2003/0S9Ci ffDP79T00975A019900080001-3 C USSR-CHINA: The sharp attack on China in to- day's Pravda minces no words in indicating that Mos- cow sees malicious intent in Peking's invitation to President Nixon. The lengthy article by "I. Alexandrov"--a pseu- donym employed to indicate high-level party endorse- ment--is Moscow's strongest public thrust at China in over a year. It sets the Chinese bid to the Pres- ident in the context of Peking's over-all foreign policy--which it brands as primarily motivated by "anti-Sovietism." It expresses displeasure with a recent Chinese theoretical article that rationalized the move toward the US in terms of isolating the "primary enemy." It labels Chou En-lai's citation of a "threat from the north" in his recent interview with James Reston as "mythical," pointedly noting that the USSR has no territorial claims against China. A substantial section of the article attacks Peking's attempts to undermine Soviet domination of Eastern Europe. Although avoiding the stronger con- demnations of Peking's alleged efforts to establish an "anti-Soviet axis" in the Balkans that have ap- peared recently in the East European press, it ac- cuses the Chinese of "seeking to set socialist states at loggerheads." One principal theme in the article is the exhortation that Communists should "enhance in every way their vigilance against Maoism." The article restates Soviet intentions to seek better relations with China, but unlike some pro- nouncements prior to the announcement of the Presi- dent's visit, carries no note of conciliation. In- deed, the article seems somewhat defensive in jus- tifying Kremlin policy toward Peking, suggesting that the leadership may be sensitive to criticism that it has been too easy on Peking. "Alexandrov's" treatment of China stands in marked contrast to recent Soviet handling of US motivations for improving relations with China. (continued) 4 Sep 71 Central Intelligence Bulletin Approved For Release 2003/0q1diqk-P P79T00975A019900080001-3 Approved For Release 2003/0$3JR1ffDP79T00975A019900080001-3 Pravda on 2 September, for example, presented a relatively balanced account of Secretary Rogers' speech to the American Legion, specifically noting his assurance that US China policy does not mean any lessening of interest in serious negotiations with the USSR. Such treatment suggests that US of-- forts to reassure Moscow on the visit are having some success and indicates that Moscow does not want to damage its wide-rangin contacts with Wash- ington through harsh polemics. 4 Sep 71 Central Intelligence Bulletin 25X1 Approved For Release 2003/01I11-"abP79T00975A019900080001-3 Approved For Release 2003/OWPIC. INTERNATIONAL MONETARY DEVELOPMENTS: Europeans are increasingly taking the position that an over-all adjustment of exchange parities should be accompa- nied by some increase in the price of gold. Various Dutch, British, and German officials have recently expressed this idea--perhaps as a sop to the French. For the French, this position re- flects long-standing views on what is required. A high Dutch Finance Ministry official claims that a "modest"--perhaps five-percent--increase could be decisive in fostering a joint Common Market adjust- ment offer. Some British Treasury officials also are taking the line that a small increase in the of- ficial gold price might facilitate monetary reform. German Bundesbank Vice President Emminger, at last week's monetary symposium in Austria, likewise in- dicated that although the economic rationale for a gold-price increase has been questioned, it is nec- essary as a political gesture. Early removal of the US import surcharge re- mains a major aim. In an argument which may be in- creasingly used, the Belgian Treasury director has referred to the difficulty of effecting parity changes while the surcharge persists and distorts judgment on what the rates should be. In the view of some European officials, there will continue to be uncertainty about the proper response to the US program until it is clear what the US really expects. According to a Dutch offi- cial, a definitive statement is needed most urgently on what the US wants in the monetary, commercial, and burden-sharing fields and what it is prepared to give "in addition to elimination of the sur- charge." The Belgian finance minister alluded in Parliament this week to the "serious political im- plications" of the apparent US desire for solutions of problems going far beyond the confines of a new international monetary system. (continued) 4 Sep 71 Central Intelligence Bulletin Approved For Release 2003/051 JR(4RP79T00975A019900080001-3 Approved For Release 2003/04W. l -'i DP79T00975A019900080001-3 Despite the emergence of common themes on the European side, there are still no signs of a recon- ciliation of French differences with the other Euro- pean Community members. The Italians--who have also called for a devaluation of the dollar to accompany other currency revaluations--will meet separately with the Germans and French this weekend at the min- isterial level. Paris, however, is presumably still resisting any common Community position that would require revaluing the franc. France appears deter- mined not to lose the edge in intra-European trade it gains from the present upward floating of German and Dutch currencies. On the basis of monthly data now available, it appears that European central banks absorbed record amounts of dollars during August. British reserves increased by $937 million despite debt repayments of $626 million. In France the increase was $1.08 billion. The French increase was a product of the Bank of France supporting the "commercial" franc, which has hovered near its floor since the intro- duction of the two-tier market. In Tokyo, the Bank of Japan reportedly continued to buy dollars heavily yesterday to restrict the yen's appreciation. In another development, Canadian Prime Minister Trudeau plans to take special measures to assist in- dustries hurt by the US import surcharge. The meas- ures are to be announced at the resumption of Par- liament on Tuesday. Ottawa hopes to cushion the impact of the surcharge on the economy's recovery. No details are available, but the measure will prob- ably include tax relief. 4 Sep 71 Central Intelligence Bulletin 5 25X1 Approved For Release 2003/0~ 9c k,-ADP79T00975A019900080001-3 Approved For Release 2003/0~CIt-I~IP79T00975A019900080001-3 CHILE-USSR: Chilean Army representatives have claimed success for their mission to explore broader contacts with the Soviet military. 25X1- e mission was cordially received by senior Soviet military leaders, I An agree- ment apparently was reached to supply unspecified A purchase of any significant quantity of arms from the USSR would indicate that President Allende's desire to broaden relations with Communist countries has prevailed over objections from the Chilean mili- tary. Many officers protest that conversion from Western weapons to Communist-made arms would be pro- hibitively complicated in terms of maintenance and training. The army chief of staff reportedly said that Allende's expression of interest in posting an attache of general rank to Moscow was viewed by many high-ranking officers as unjustified by the present minimal military relations between the two countries. Consistent with Moscow's cautious policy toward the Allende government, the Soviets are not known to have made the blanket offers of military assist- ance that typically follow the establishment of "progressive" governments in underdeveloped coun- tries. The same delegation that visited Moscow also stopped in Eastern Europe, but reportedly these countries--more interested in the commercial aspects of military sales--were not responsive to Chilean requests. 4 Sep 71 Central Intelligence Bulletin 25X1 25X1 25X1 25X1 Approved For Release 2003/0 I P79T00975A019900080001-3 Approved For Release 2003/05/OEQR- P79T00975A019900080001-3 BOLIVIA: President Banzer could soon face growing problems in keeping his National Popular Front regime intact. Dissatisfaction with the governing alliance has surfaced among Nationalist Revolutionary Party (MNR) militants. Party head Victor Paz Estenssoro has publicly called for loyalty to the military and the Bolivian Socialist Falange (FSB), but Paz has also declared that he is the caudillo of Bolivia. 25X1 The party has also re- nutted demands from its left wing that it leave the coalition government, and Paz supporters may act to prevent the return of still-exiled left-wing leader Hernan Siles. 25X1 Armed Forces Commander Iriarte, who covets the presidency, is already lining up support from dissident MNR elements in preparation for a bid for power. A "Revolutionary Resistance Front," claiming to represent most of the extreme left, has called for an armed struggle, and the regime has begun to prepare itself to counter an expected urban terror- ist campaign. A crackdown currently under way against the violence-oriented National Liberation Army (ELN) is likely to be used to deal with ex- treme leftists whether or not they actually have ELN connections. Banzer has now declared that actions of the Torres regime deemed to have been "demagogic" will be reviewed, but that the nationalization of the US-owned Bolivian Gulf Oil Company in 1969 is ir- reversible. The new Bolivian Government has asked for $20 million in US emergency grant assistance to stimulate the economy and help the regime through its first "critical" 100 days. 4 Sep 71 Central Intelligence Bulletin 25X1 Approved For Release 2003/05/ ((;I* iP79T00975A019900080001-3 Approved For Release 2003/05/:6*P79T00975A019900080001-3 URUGUAY: The presidential campaign is prompt- ing an uncommon level of violence and political ex- tremism that is likely to persist through the Novem- ber elections. Several violent incidents in the last week dram- atize what is becoming an increasingly familiar sce- nario between contending leftist and government forces. On Wednesday, a clash between student dem- onstrators and police erupted into a melee that left one student dead and two policemen injured. Bomb- ings, presumably by youth groups, persisted that night, with leftist facilities increasingly the tar- get of anti-Communist organizations formed in re- sponse to the terrorist violence. In apparent re- taliation for the student death, two police were machine-gunned on Thursday, probably by Tupamaros. In addition, a labor union sympathetic to the Tupamaros defied the government's restrictions on strikes and demonstrations and provoked additional violence that left one person wounded. Pro-Tupamaro labor affiliates, as opposed to the softer-lining Communist-allied unions that dominate the major fed- eration, seem likely to continue their agitation. In the presidential campaign, President Pacheco, who recently confirmed that he will seek re-election in November via a constitutional amendment permit- ting a second term, is basing his primary appeal on his no-nonsense law-and-order reputation. The left- ist coalition Frente Amplio, dominated by the Commu- nists, is attempting to mount a major challenge to the established parties by decrying the economic and political failure of their policies and promis- ing a new leftist approach. The Tupamaros, mean- while, continue to play both ends against the middle, supporting the Frente political challenge while main- taining a high level of violence designed to prompt a government overreaction that might lead to can- cellation of the elections. (continued) 4 Sep 71 Central Intelligence Bulletin Approved For Release 2003/05/x;6 P79T00975A019900080001-3 Approved For Release ,qpC. i DP79T00975A019900080001-3 The majority of the factions backing the Frente recognize that while incidents emphasizing Uruguay's "crisis" may boost their fresh-approach sloganeering, their political strategy dictates staying within the bounds established by the government. Previously the Communists were generally able to control stu- dent and labor dissidence, but radical, pro-Tupamaro sectors have increased their strength and the Tupa.- maro strategy is served by continuing violence. 25X1 4 Sep 71 Central Intelligence Bulletin 9 Approved For Release 2003/05N]RRpP79T00975A019900080001-3 Approved For Release 2003/05L1dCaA-AP79T00975A019900080001-3 MALAGASY REPUBLIC: The national congress of the ruling Social Democratic Party (PSD), scheduled to convene next week, will probably be carefully rigged to result in the renomination of President Tsiranana. In recent months Tsiranana has virtually en- sured his uncontested renomination by taking firm control of the party apparatus after engineering the removal of the PSD's executive bureau and by ridding the party of many supporters of ex - vice president Resampa. Most political speculation about the congress centers on the selection of a new sec- retary general to fill the vacancy left by the dis- credited Resampa. So far there is no indication of who will be named to the post. Tsiranana's renomination will mean his almost certain re-election to the presidency. The govern- ment's image has been tarnished during the past year by a bloody uprising in the southern part of the island and by the detention of Resampa for allegedly plotting against the government. Tsiranana, how- ever, has recently made an effort to soften the ef- fects of these events with a campaign of countrywide personal appearances. Opposition to the PSD will be modest at best; in last year's legislative elec- tion the main opposition party, the Congress Party for the Independence of Madagascar, managed to win only three of 107 seats with the PSD sweeping the rest. Tsiranana now may have more in mind than just another seven-year term. The President might be planning to dissolve the National Assembly, to over- see the selection of still more compliant deputies, and to introduce a constitutional amendment permit- ting his election to the presidency for life. Tsir- anana was apparently impressed by the election of President Banda of Malawi to a life-long term last July. It has also been rumored that if there is no 4 Sep 71 Central Intelligence Bulletin Approved For Release 2003/051 ~P79T00975A019900080001-3 Approved For Release 2003/0?9CCTAF--RDP79T00975A019900080001-3 opposition to his renomination, Tsiranana may call for immediate elections, instead, of waiting until early 1972 as scheduled. Such a. move would be un- constitutional, but this probably would not dissuade the mercurial Tsiranana, who advanced the date of the 1965 presidential elections. 4 Sep 71 Central Intelligence Bulletin 25X1 SECRET Approved For Release 2003/05/19 : CIA-RDP79T00975AO19900080001-3 Approved For Release 2003/05SEf P79T00975A019900080001-3 tIRAQ: I there was an unsuccess u attempt last week to assassinate President and Revolutionary Command Council (RCC) Chairman Bakr. Baghdad has reported only that Bakr was temporarily hospitalized for a "minor indisposition." Saddam Tikriti, Bakr's dep- uty in the RCC, is widely reported as the real power in the country and as vying with Bakr and others for ultimate control. 4 Sep 71 Central Intelligence Bulletin 25X1 25X1 Approved For Release 2003/055 +'MP79T00975A019900080001-3 Secr roved For Release 2003/05/19 : CIA-RDP79T00975AO19900080001-3 Secret Approved For Release 2003/05/19 : CIA-RDP79T00975AO19900080001-3