CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019900080001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 14, 2016
• Document Release Date: March 27, 2003
• Sequence Number: 1
• Publication Date: September 4, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence .Bulletin
Secret
N?_ 42
4 September 1971
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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)
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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.
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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)
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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.
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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)
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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.
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CHILE-USSR: Chilean Army representatives have
claimed success for their mission to explore broader
contacts with the Soviet military.
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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.
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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.
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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.
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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.
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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)
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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.
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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
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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.
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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.
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