CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020400030001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: May 29, 2003
• Sequence Number: 1
• Publication Date: November 3, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
State Dept. review completed
N2 042
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No. 0263/71
3 November 1971
Central Intelligence Bulletin
JAPAN: Sato speaking more of normalizing relations
with Peking. (Page 1)
NORTH VIETNAM: Floods may hamper agricultural out-
put over the next year. (Page 2)
THAILAND: Increased political maneuvering. (Page 3)
EUROPEAN COMMUNITIES: Search for a solution to mon-
etary problem. ]?age 4)
USSR: Regime calls for increase in consumer goods
production. (Page 5)
SUDAN-USSR: Relations said to be warming somewhat.
(Page 6)
EAST PAKISTAN: Economic activity slowly increasing.
(Page 7)
CARIBBEAN: Prospects for West Indies union assessed.
(Page 9)
YEMEN (SANA) - YEMEN (ADEN): Cross-border forays
continue (Page 1L)
SYRIA: Anti-regime activity in Lebanon (Page 12)
PERU - COMMUNIST CHINA: Diplomatic relations
(Page 13)
EQUATORIAL GUINEA: Pardons for alleged plotters
Page 13 )
VENEZUELA: Oil company income taxes (Page 13)
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JAPAN: Prime Minister Sato is speaking more
about moving toward the normalization of relations
with Peking.
With the resolution of the China issue in the
UN, the prime minister is faced with mounting de-
mands at home for a rapid improvement in relations
with Peking. He now has publicly stated that offi-
cial negotiations must begin that would lead to
recognition. He intends to dispatch a high-level
Liberal Democratic Party emissary to Peking to pave
the way for a visit by either himself or Foreign
Minister Fukuda. The ruling party's executive
board, after long deliberation, has reached agree-
ment on a resolution which acknowledges that the
Peoples Republic represents China.
This past week in Diet debate Sato made what
the press termed the first formal Japanese apology
for its wartime actions on the mainland and said
that Peking need have no fear of a Japanese mili-
taristic revival. Two days ago Sato admitted that
the logical foundations for the 1952 Japan - Republic
of China Peace Treaty had crumbled with the passage
of the Albanian Resolution. While he stated flatly
that his government would not abrogate the treaty
as a pre-condition for negotiations with Peking,
both he and Fukuda have expressed a willingness to
consider the treaty a matter for discussion.
3 Nov 71 Central Intelligence Bulletin
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NORTH VIETNAM: The effects of recent floods
may hamper agricultural output for the next year
and increase dependence on food imports.
It is now clear that the regime views agri-
cultural prospects with considerably less optimism
than was the case a month ago. To make up for rice
losses, the minister of domestic trade has announced
the institution of a "winter crop" in addition to
the spring and autumn crops. The winter crop will
consist basically of secondary crops which can be
harvested in 50 to 80 days. The new program's suc-
cess will depend in part on increasing the acreage
in miracle rice strains, which can be planted some
two months later than traditional rice strains.
Considerable effort will be required to restore
the irrigation system, which is essential for cul-
tivation during the dry season. A large number of
pumping stations appear to have been damaged. Pho-
tography shows extensive breaching of irrigation
canals, which will have to be repaired before water
can be channeled from the rivers to distant fields
in the countryside. Silt deposits to some degree
will block other irrigation canals in flooded areas.
Reconstruction of irrigation facilities may take up
to one year, in which case both the fifth- and
tenth-month rice crops in 1972 would be affected.
The urgency of the repair effort apparently is re-
quiring that manpower be taken from the schools.
Other effects of the flood have been largely
brought under control. By mid-October the country's
main rail arteries were back in service, but there
was still considerable damage to secondary road
systems. Most industrial operations probably were
resumed well before the end of September, although
a few plants were idle due to transportation bottle-
necks. The regime appears to have acted quickly and
effectively to stem hazards to health and the out-
break of epidemics.
Central Intelligence Bulletin
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THAILAND: A round of increased political
maneuvering appears under way in the military-
dominated government.
A major cause of restiveness may be uncer-
tainty that Prime Minister Thanom, who is also
supreme commander of the armed forces, will indeed
leave office in early 1973 when the next parlia-
mentary elections are scheduled. Both military
and political elements claim to be frustrated
over Thanom'.s indecisive leadership. Although
this is partially true, most critics are younger
officers who appear chiefly motivated by ambi-
tion and want to be in position for political
advancement as the present top leadership retires
within the next few years.
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A related factor stimulating restiveness is
the fact that supporters of both Thanom and Praphat
are intensifying their maneuvering for positions
of advantage before the expected transition. Al-
though internal dissatisfaction and overt criticism
have reached a relatively high level, the political
situation is still far from the crisis stage.
Central Intelligence Bulletin
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SECRET
EUROPEAN COMMUNITIES: West Germany is contin-
uing its efforts to lead the EC toward a solution
of the present monetary situation.
Chancellor Brandt recently sent President Pom-
pidou a personal message expressing his willingness
to meet with the French President on the interna-
tional monetary situation. Following this, at an
EC Council meeting, the German representatives urged
that the EC work out an interim solution to current
problems, including new exchange rates, by the end
of the year if a worldwide solution does not emerge
from the November meeting of the Group of Ten. They
also suggested that the EC adopt a flexible position
in talks with the US.
Within the Community the Germans have shown a
willingness to compromise to achieve the accommoda-
tion with France that is necessary for a Community
solution. They are now prepared to consider some
controls over capital movements to curb speculative
flows, as the French have urged. In an additional
gesture to the French, Germany has become more flex-
ible on agricultural policy measures that must ac-
company a realignment of EC currencies. Although
Agriculture Minister Ertl had stated earlier that
Germany would probably maintain its present system
of compensatory taxes and subsidies for agricultural
trade even after a realignment of parities, Germany
has recently reassured the EC that it would not fol-
low any such unilateral policy. Instead, Bonn would
consider other solutions for maintaining farm in-
come following revaluation, such as a change in the
unit of account on which agricultural prices are
based, as suggested by Pompidou, or larger refunds
to farmers from the value-added tax on farm prod-
ucts.
3 Nov 71 Central Intelligence Bulletin
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SECRET
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USSR: A new party and government decree pledges
a boost the quantity and quality of consumer goods
production, re-emphasizing the leadership's support
for this sector.
The decree states that the output of selected
consumer goods in 1.971-75 will rise by 90 percent
over that of 1970. It also stresses the need to
improve their quality and variety. Party chief
Brezhnev at the 24th Party Congress last spring
promised that a program on consumer goods would be
forthcoming.
Regarding implementation, the decree demands
that party and government organizations stop enter-
prises from cutting the production of "items in
great demand." It warns that the fulfillment of
the main success indicators and formation of incen-
tive funds in enterprises producing mainly non-
consumer items will be directly dependent upon
their consumer goods production. In addition, the
decree provides for the creation of a reserve fund
to subsidize the production of those consumer items
"having a comparatively low profitability."
The traditional Soviet emphasis on heavy in-
dustry and a price and incentive system directed
toward that end have conspired against the produc-
tion of an adequate supply of consumer goods. This
decree represents an attempt to satisfy the con-
sumer without reordering the economy's basic priori-
ties. It relies on direct administrative control
of the enterprise to order the output of more con-
sumer goods rather than on economic levers such as
a more rational price system.
3 Nov 71 Central Intelligence Bulletin
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SECRET
SUDAN-USSR: Some improvement in relations ap-
pears to be inthe offing, but the Sudanese continue
to explore alternate arms sources.
Soviet officials in Khartoum are trying to re-
sume working relations with the Sudanese. The Su-
danese minister of economy told US officials that
the Soviet economic counselor recently called on
him for the first time since the coup and counter-
coup last July. The Soviet official specifically
cited the Soviet-Sudanese economic agreement and
said that, despite press reports to the contrary,
the USSR would still be taking Sudanese cotton in
return for sugar and other products.
There have been virtually no deliveries of So-
viet military equipment since last July, and Khar-
toum is becoming increasingly concerned about spare
parts, because 60 percent of its equipment is of So-
viet origin. Sudan will resort to cannibalization
to keep its Soviet equipment in operation, accord-
ing to the Sudanese minister of information and
culture. Khartoum, however, is also interested in
developing new arms sources--possibly British or
Libyan--to support the rest of its equipment. As
further evidence of the Sudanese desire to stay out
of the grip of the Soviets, the minister said that
Khartoum had no real need for the Soviet-supplied
MIG-21s, surface-to-air missiles, and heavy tanks.
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EAST PAKISTAN: General economic activity is
slowly increasing, but Mukti Bahini actions are keep-
ing the vital jute and tea industries depressed.
Large areas of the jute crop have gone unhar-
vested, and there are reports of increased smuggling
to India. Jute exports declined sharply in October
as port stocks were exhausted. Stocks upcountry are
high, but the Mukti Bahini have disrupted land and
water transport, and movement from the main growing
areas in north Bengal is far below normal.
Although jute mills still have large raw jute
stocks because of reduced operations, Mukti Bahini
threats to mill workers and sabotage of power plants
and transmission lines have held output to about
half of normal. As a result, raw and manufactured
jute exports are expected to decline more than 50
percent in the current fiscal year.
This year's tea harvest is expected to be only
about one quarter of last year's crop, and even this
small amount will not reach the ports unless trans-
port routes can be opened. The major tea producing
district is virtually cut off from the rest of the
province, and acute shortages of diesel fuel and
gasoline have already closed almost three quarters
of the tea processing plants.
Meanwhile, people are returning slowly to the
cities and labor attendance is up. Retail trade in
October was up five to ten percent over the previous
month but is still generally less than half of the
pre-March level. Rice prices declined somewhat from
their peak in mid-October but remain 20 percent above
last year's price. Many basic consumer goods are in
short supply in the cities and nonexistent in the
countryside.
Central Intelligence Bulletin
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Proposed New West Indian State
CUBA
MExICO CAYMAN
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ONDURAS
HONDURAS
NICARAGUA
COSTA RICA
BAHAMA
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TORTOLA
$T' 1T. JOHN
THOMAS
VIEQUES (U.S.)
ST. CROIX
BERMUDA
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DOMINICAN Aree of map
HAITI REPUBLIC ---
1
MARTINIQUE
(Fr.)
A- ST MARTIN )(GUadelou Be)
ST. MAARTEEN, H \`ST. BARTHELEMY
hL,BSBh I, : Barbuda
ST. [U~TA'IIUS - I,
St. Christop er
(St Kitts ANTIGUA
F F "' Nevis 'Antigua
AN Redonda.-'
MONTSERRAT
GUADELOUPE
(Fr.)
11
TOBAGO
TRINDAD AN[)TOIIACO
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SECRET
CARIBBEAN: The projected West Indies nation
faces major difficulties.
The ambitious plan, announced on 1 November,
calls for the union of Guyana with five British West
Indian Associated States. It was developed under
the aegis of Prime Minister Burnham of Guyana, who
sees himself as the leader of a unified Caribbean.
Its chances for success are dimmed, however, by the
disinterest of other equally strong premiers from
Jamaica, Barbados, and Trinidad-Tobago and the un-
willingness of the sixth Associated State, Antigua,
to join at present.
The plan's timetable calls for the establish-
ment by 30 November of a preparatory commission sup-
ported by a policy-making council of ministers. A
constituent assembly has been scheduled for 1 January
1972 to draft a constitution, which will then be
subject to parliamentary approval by the various
participants. After the constitution is promulgated
in 1973, the Associated States of Grenada, St. Vin-
cent, St. Lucia, Dominica, and St. Kitts-Nevis-
Anguilla are to terminate their status with the UK.
Although a genuine desire exists on the part of
the smaller states to establish a union within which
they will have a larger voice in the political and
economic affairs that directly concern them, they
still face many of the same problems that caused the
breakup of the West Indies Federation in 1962, after
only four years of existence. Insular attitudes,
petty jealousies, and lack of grass-roots support
for federation are only a few of the more outstand-
ing problems. In addition, some of the states do
not want to jump from an association dominated by
the UK to one dominated by Guyana. Efforts to lure
Jamaica, Barbados, and Trinidad-Tobago into the
latest scheme have not produced much success, al-
though Trinidad-Tobago has donated $7,500 for ex-
penses. Without one or more of these larger and
more stable governments participating, it is doubt-
ful that the new state could prove economically or
politically viable.
Central Intelligence Bulletin
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SECRET
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Yemeni Border Incursions on the Upswing
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YEMEN (SANA) - YEMEN (ADEN) : A tribal force
affiliated with the National Unity Front (NUF),
which is based in Yemen (Sana), attacked the Yemen
(Aden) town of Mukayris last Sunday. The Adeni
prime minister claims the invaders were repelled
and that US arms and ammunition were captured. The
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is being urged by the ana
government to es :.a is bases in Yemen (Aden),
thereby eliminating the justification for punitive
raids Adeni forces like the one in mid-October.
Adeni forces are
even now preparing for another r
(Sana) against NUF sanctuaries loc
ust into Yemen
ated near the
Adeni town of Bayhan.
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(continued)
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SECRET
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SYRIA: President Asad reportedly is in-
creasingly concerned over the anti-regime activities
of Syrian exiles and Iraqi Ba'thists. Asad has
appealed to Lebanon, the scene of much alleged coup
plotting and Iraqi-sponsored propaganda, to curb his
rivals. Beirut, which has improved relations with
Damascus since Asad took power a year ago, has prom-
ised to attempt to restrain anti-Asad elements but
Lebanon's ability to control them is limited. I
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Central Intelligence Bulletin
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PERU - COMMUNIST CHINA: The two countries yes-
terday announced the establishment of full diplo-
matic relations. According to the joint communique,
Peru recognizes Peking as the sole legal government
of China, and "takes note" of Peking's claim to
Taiwan. Peking recognizes Peru's sovereignty over
200 miles of territorial waters. Cuba and Chile
are the only other Latin American countries enjoy-
ing formal ties with Communist China, although Ar-
gentina presently is engaged in negotiations aimed
at establishing diplomatic relations.
* * *
EQUATORIAL GUINEA: The government has pardoned
a few of the many minority tribesmen arrested last
August for alleged plotting. The highest ranking
suspect, the vice president, has been restored to
office. What had been portrayed as either a coup
attempt or a secessionist effort seems now to have
been largely fabricated by President Macias as a
pretext to eliminate potential foes. Macias' neg-
lect of Equatorial Guinea's deteriorating economy
may yet cause his downfall, but the President ap-
pears to have emerged from this latest episode
stronger than ever.
* * * *
VENEZUELA: The government is realistically
appraising international marketing conditions and
apparently will not raise petroleum tax. reference
values for 1972 much above present levels. The
values, which are used to calculate oil company in-
come taxes, were raised sharply at the beginning of
1971 when international demand for Venezuelan oil
was very strong. This year, however, Venezuela's
exports have slowed as foreign demand weakened, and
crude oil production at the end of September had
dropped to three million barrels per day compared
with a daily average of 3.7 million during 1970.
Although production is likely to recover in Novem-
ber-December when seasonal demand for heating oil
increases, crude oil output this year is still ex-
pected to be about two percent below 1970's record
high of over 1.3 billion barrels.
Central Intelligence. Bulletin
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Secret
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