CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020900050001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 14, 2016
• Document Release Date: April 8, 2003
• Sequence Number: 1
• Publication Date: January 8, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N 042
8 January 1972
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No. 0007/72
8 January 1972
Central Intelligence Bulletin
PAKISTAN: President Bhutto encounters opposition
on several fronts. (Page 1)
CHILE: Allende counters vote to impeach interior
minister by shifting him to defense ministry.
(Page 3)
URUGUAY: Renewal of terrorist activity appears im-
minent. (Page 4)
SOUTH KOREA: President Pak tightens control over
press. (Page 5)
JAPAN: Interest in increasing role of yen as set-
tlement currency. (Page 8)
ISRAEL-LEBANON-SYRIA: Fedayeen attacks may draw
Israeli reprisals (Page 9)
YUGOSLAVIA: Opposition to Tito's proposals (Page 9)
LAOS: Pressure on Long Tieng continues to rise
(Page 11)
ECUADOR: Tension grows in anticipation of return
of exiled politician (Page 11)
NETHERLANDS: Discount rate lowered (Page 12)
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Quetta
WEST ?Multan
NOTE: "Azad Koshmir State" is not
considered a province.
PAKISTAN;
NORTfi
J WWEI
t)r TIER 'AZA ? Kashmir
Peshawar xAs
Islamabad:
Sialkut.
.Jodhpur
New Delhi
INDIA
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PAKISTAN: President Bhutto is beginning to en-
counter opposition on several fronts.
The left wing of Bhutto's Pakistan People's
Party (PPP) is increasingly open in its criticism
of the limited nature of the government's national-
ization policies. Probably hoping to push Bhutto
further, Finance Minister Hasan has speculated to
newsmen that more industries will be taken over.
Radical PPP members are demanding the nationaliza-
tion of banks, textiles, and transportation. Health
Minister Rashid--probably the most important of the
radicals--has let it be known he might resign if
Bhutto fails to improve the lot of farmers and work-
ers. Dissatisfaction is also evident among workers
in Karachi and Lahore, where a recent series of
strikes is probably due in part to the failure of
Bhutto's policies to meet labor's expectations.
Although Bhutto cannot afford to alienate the
strong left wing of the PPP, he probably will be
cautious about giving in to its demands. Neither
the officer corps nor the right wing of Bhutto's
party, which includes large landowners, would be
pleased with sweeping economic reforms.
opposition of the officer
corps to the government's recent housecleaning in
the ranks of senior officers is growing, but so
far is directed mainly at acting army commander
Gul Hassan. Some :Punjabi officers reportedly be-
lieve the retirements were directed at the Punjabis
as a group.
Bhutto is also having problems with the fac-
tion of the National Awami Party headed by Wali
Khan (NAP/R), which expects to control the provin-
cial governments of Baluchistan and the Northwest
Frontier (NWFP), the two least, populous provinces
of Pakistan, but the two where opposition to the
central government has always been strongest.
(continued)
8 Jan 72 Central Intelligence Bulletin
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Bhutto may still be able to work out an arrangement
with Wali Khan, and in any case the NAP/R is weak
in the two largest provinces--the Sind and the Pun-
jab--and has strong conservativ pposition in the
NWFP.
8 Jan 72 Central Intelligence Bulletin
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SECRET
CHILE: President Allende's move in shifting
Socialist Interior Minister Jose Toha to the defense
ministry is in response to the vote by the lower
house of congress to impeach Toha.
The shift finesses possible Senate confirmation
of the impeachment, even though opposition parties
were less sure of mustering their slim majority in
that house. It also puts Toha in a job Allende con-
siders increasingly vital. The President may hope
that Toha's experience as interior minister in or-
ganizing police and other internal security forces
in support of the government will now be useful in
dealing with the growing evidence of discontent
among military officers. Allende probably took the
precaution of discussing the appointment during a
two-hour visit to the defense ministry on 5 January.
He may also have discussed the appointment of a mil-
itary man to a cabinet post in the changes he will
make later this month.
The switch of 70-year-old Radical Alejandro
Rios from his figurehead performance at defense to
interior puts him first in line to succeed Allende.
There is no vice-president. Rios, by training and
experience, is a teacher whose primary qualifica-
tion is a long and close association with Allende
that spurred him to lead a leftist faction out of
the Radical Party to support Allende's bid for the
president in 1964.
The elevation of a Radical to the top post
could be used by the President to justify reducing
the number of cabinet posts held by that declining
and divided party. One aspect of Rios' appointment
that could arouse uneasiness in both coalition and
opposition is the fact that the powerful job of un-
dersecretary is held by a capable young Communist,
Daniel Vergara, who will no longer have a strong
superior to offset him.
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URUGUAY: The expected renewal of terrorist ac-
tivities seems to be at hand.
A Tupamaro proclamation, broadcast on 6 January
during a terrorist take-over of a radio station in
the capital, declared an end to the organization's
standdown. Operations had been virtually halted
prior to the elections on 28 November in order to
boost the stock of the leftist coalition, which
nonetheless attracted only about 18 percent of the
vote. The take-over follows reports that imprisoned
Tupamaro members expected increased activities, with
US public safety official Lee Echols a likely tar-
get. Other leftists, including former congressman
and prominent terrorist lawyer Ariel Collazo, have
also predicted an early renewal of the Tupamaro of-
fensive, and this expectation has been widely shared
even outside of terrorist circles.
or several weeks the leftist press has been at-
tacking Echols and others. Echols has been labeled
a CIA replacement for Dan Mitrione, the public safety
official kidnaped and murdered in 1970. On 30 De-
cember, the government closed the leftist publica-
tion that has featured the attacks, citinq the un-
founded allegations against Echols as the specific
reason for the indefinite suspension.
The Tupamaros have carried out more than a dozen
kidnapings since 1968. The three current captives,
all Uruguayans, have been held for more than nine
months.
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SOUTH KOREA: President Pak is moving ahead
with plans to bring the South Korean press under
greater government control.
Pak has ordered the Ministry of Culture and
Public Information to merge the country's three ma-
jor news services 25X1
The purpose of the merger is to establish direct
Bove n-~ control over the dissemination of informa-
tionru-11-3
I?tixl
vidua newspapers will follow.
Pak's crackdown on the press is part of a
broader effort to strengthen his grip on the nation
in the wake of his 6 December declaration of an
emergency. The South Korean press, despite severe
restriction by a succession of regimes, remains a
major critic of the government, and Pak undoubtedly
is anxious to prevent any press reflection of grow-
ing public concern that he intends to impose "one-
man rule." He also has been concerned for some
time that South Korea's relatively outspoken press
placed Seoul at a propaganda disadvantage vis-a-vis
Pyongyang.
Despite the government's confidence that it
can limit domestic and international criticism, the
action against the press could generate consider-
able adverse comment. South Korea may again be
censured by the International Press Institute for
denial of freedom of the press. Indeed, South
Korean press interests have encouraged such outside
help to ward off more stringent government controls.
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Im,oves to tignten control Uvus. -L11u-
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JAPAN: Recent speculation in the Japanese and
American press on the formation of a "yen economic
bloc" reminiscent of the prewar "Asian co-prosperity
sphere" goes far beyond Tokyo's modest interest in
the possibility of increasing the role of the yen
as a settlement currency. The Ministry of Finance
continues to oppose any form of currency union or
even formal yen payments arrangements.
Tokyo is planning to relax gradually existing
foreign exchange controls and practices that pres-
ently preclude use of the yen as a settlement cur-
rency. If, after the relaxation, Japanese export-
ers can make yen contracts with customers, Tokyo
appears willing to nurture such a development slowly.
Interest in the use of the yen as a settlement
currency arose as a result of the experience of
Japanese traders during the suspension of the dol-
lar's convertibility from mid-August until the re-
cent currency settlement in December. Almost all
Japanese trade was conducted in dollars and it be-
came difficult to conclude new contracts because
of uncertainty regarding the eventual yen revalua-
tion. Use of the yen in international trade would
considerably ease this problem during any such pe-
riods in the future. Since a number of countries
in the Far East conduct a large share of their trade
with Japan, the use of yen for payments, and even
as a supplementary reserve currency, is plausible
over the long term.
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ISRAEL-LEBANON-SYRIA: Increased fedayeen ac-
tivity along Israel's borders with Lebanon and
Syria raises the possibility of Israeli reprisals.
Terrorist attacks mounted from bases in Lebanon
have increased since late December; the latest in-
cident occurred on Thursday when rockets were fired
at an Israeli border town. In a.particularly pro-
vocative incident-in the Golan Heights on Thursday,
fedayeen based in Syria killed and decapitated an
Israeli Army engineer. Editorials in the Israeli
press have warned that unless the Lebanese and
Syrians control terrorists operating within the
territory, Israel will be compelled to act. Leb-
anese nervousness was highlighted in a statement
by Prime Minister Salam charging that Israel was
preparing to take military action against Lebanon.
YUGOSLAVIA: President Tito"s proposals for
reorganizing t e League of Communists of Yugoslavia
(LCY) are encountering growing opposition. Some
members of the LCY's statutory commission believe
that the proposed reforms require changing the
party statutes--something that entails convocation
of a party congress. The next congress is not due
until 1974; in the interim an LCY conference is
supposed to meet annually--the next on 25-26 Jan-
uary--to oversee party work and ratify policy
changes. Although the upcoming conference lacks
authority to change any statutes, it is empowered
to convene an extraordinary congress which could
resolve the impasse. The two-day postponement. of
the next LCY presidium, now set for 12 January,
probably also stems from continuing disagreement
at the highest levels over Tito's directives. On
6 January the party's executive bureau admitted
that it had listened to "critical observations"
about the party and had ordered "a deeper and
broader analysis" of its current problems.
(continued)
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LONG TIENG AREA
i Governent-held location
Communist-hold location
Highpoint
0 5
Miles
Khang KhoIIIIII
Phou Pha Sal
? r ~l
O
NVA attacks'
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C LAOS: The level of enemy pressure around Long
Tieng continues to rise. On 6 January the remaining
ammunition in Long Tieng was destroyed-probably by
North Vietnamese sappers. The resulting explosions
closed the airstrip and hurled shells nearly a mile.
Sizable enemy probes and shelling attacks were re-
ported at almost all of the outlying defensive posi-
tions, including Sam Thong, Phou Long Mat, Phou Pha
Sai, and Pha Dong, but no major positions changed
hands.
ECUADOR: Political tension is increasing in
anticipate _t 1-6-n of the return today from exile of the
populist politician Assad Bucaram. On the night
of 5 January at least eight bombs exploded in
Guayaquil, allegedly set off by supporters of
President Velasco who oppose Bucaram. On Thurs-
day, Velasco flew to Guayaquil and angrily de-
nounced the bombings, promising to maintain public
order. Estimates of the crowd being assembled by
Bucaram's supporters to greet him range as high as
150,000. Velasco reportedly is looking for an ex-
cuse to exile Bucaram again, thus removing him from
the campaign for the presidential election in June.
Should serious trouble break out, however, military
plotters might decide to make their move to seize
power.
(continued)
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NETHERLANDS: The central bank's decision to
lower its discount rate from five to 4.5 percent,
although primarily a reaction to decreases in West
Germany and the US, has domestic economic overtones.
The change, which was accompanied by a slight re-
laxation of domestic credit restrictions, reflects
mounting concern about too sharp a deceleration in
the domestic economy. In the first ten months of
1971, prices rose eight percent, private investment
grew by only two percent against an expected seven-
percent rise, productivity and private consumption
fell below expectations, and unemployment continued
to rise. If the anticipated decline in economic
growth materializes, the Biesheuvel government could
face the hard choice next spring between spurring
the economy at the risk of even greater inflation
or letting the slowdown in growth run its course.
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