CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020900100001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: June 30, 2003
• Sequence Number: 1
• Publication Date: January 14, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 042
State Dept. review completed
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14 January 1972
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No. 0012/72
14 January 1972
Central Intelligence Bulletin
LAOS: Fighting continues despite Hanoi's claim that
Long Tieng has fallen. (Page 1)
ISRAEL: Defense and finance ministers agree on new
defense budget. (Page 2)
CHILE: By-elections pose test for Allende. (Page 3)
US-EC: New trade talks unlikely to yield substan-
tlal EC concessions. (Page 4)
POLAND - WEST GERMANY: Slowdown, in emigration of
ethnic Germans strains normalization of relations.
(Page 6)
MOROCCO: Political changes will, not reduce King
Hassan's authority. (Page 7)
PAKISTAN: Break in diplomatic relations with three
Communist countries (Page 8)
USSR-CUBA: Soviet naval presence (Page 8)
HUNGARY: Decree on drug offenses (Page 9)
TRINIDAD AND TOBAGO: Government seeks higher oil
revenue (Page 9)_
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LONG TIENG AREA
Wernent eld location
C monist-held location
point
t 5
es
hou:Pha Sai
DES
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( LAOS: Despite Hanoi's claims that "Pathet Lao
forces "have captured Long Tieng, the most recent
reports indicate that as of the morning of 13 Jan-
uary (Vientiane time), fighting was still going on
in the valley and nearby positions.
To the southwest of Long Tieng, the Communists
launched a small rocket attack on Ban Son, the new
government support base. This may well presage a
growing Communist interest in this area, which is
also the center of the Meo refugee settlements.
There is no evidence that any main force North Viet-
namese units have moved into this area, but a threat
to Ban Son or the refugee settlements could well
cause Meo_irregulars to desert t:he Long Tieng area.
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ISRAEL: Defense Minister Dayan and Finance
Minister Sapir have agreed on the size of the de-
fense budget for the fiscal year beginning 1 April.
The Ministry of Defense is to be allocated
$1.35 billion, and up to $24 million more will be
made available through the so-called general re-
serve of the national budget. Previously, Sapir
had advocated that the defense budget be cut to
$1.25 billion, but Dayan had held that any reduc-
tion below $1.43 billion would endanger national
security.
The new defense allocation is significantly
less than actual outlays in the current fiscal
year. Although only $1.24 billion originally was
included for the Ministry of Defense in the na-
tional budget for this fiscal year, supplementary
appropriations and transfers from reserve funds
will bring actual defense spending to about $1.55
billion.
While the previously sacrosanct defense budget
was not trimmed as much as Sapir had advocated, the
reduction that was achieved will strengthen the
finance minister's hand in his continuing effort
to pare the budget requests of civilian ministries.
Some $83 million of the defense appropriation is
being rationalized as a "borrowing from the 1973/74
defense budget" in an attempt to reinforce this
effect. The final figure was a compromise between
Sapir and Dayan and does not represent a signifi-
cant victory for either of the two ministers, both
of whom have been mentioned as possible successors
to Piime Minister Meir.
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CHILE: The congressional by-elections on Sun-
day to fill a senate and a house seat are being
billed as a major political test of President Al-
lende's support.
The campaign is being hotly contested by the
opposition Christian Democratic (PDC) and National
parties and Allende cannot be confident that his
candidates will win. Leaders of both the govern-
ment's Popular Unity Coalition (UP) and the oppo-
sition believe that the UP senatorial candidate may
win and that the opposition candidate for the house
seat may be victorious. Both sides admit that the
contests will be close.
There has been some violence already and more
is likely. PDC leaders hope that the government's
attempts to create an atmosphere of tension will
backfire.
Defeat of the government's candidates would be
interpreted by many Chileans as another sign that
Allende is losing the majority support he claims to
enjoy. If the UP candidates win, Allende's prospects
for regaining the political initiative that he has
lost in recent weeks will be stren th ned.
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US-EC: In the current round of the trade talks
the EC is unlikely to offer concessions that will
have a substantial impact on US trade performance.
The EC has not improved its earlier negotiating
mandate. A preparatory meeting of member-state and
Commission officials last week decided, for the mo-
ment at least, not to expand the Commission's nego-
tiating instructions. This decision is consistent
with comments by French officials that the US will
get less than it wants in the current talks, but
should be satisfied with some short-term concessions
in order not to prejudice the atmosphere for later,
more far-reaching trade negotiations. The Luxembourg
official chairing the member-state preparatory com-
mittee nevertheless believes that the Commission
might seek certain revisions of its negotiating man-
date if the US can "specify the priorities of its
demands."
On the important issue of grain prices Com-
munity negotiators will continue to insist there
can be neither a reduction nor a freeze, and that
fundamental US-EC agricultural problems can only
be resolved through negotiation of world-wide
commodity agreements. The Commission's latest
price proposals for the 1972-73 crop year, in
fact, are substantially higher than earlier rec-
ommendations.
Some progress can be expected in negotiations
on proposals designed to reduce the impact of last
year's record EC grain production on world prices
and on US grain exports. The Community may expand
its proposal to increase the EC wheat stock to 3..6
million tons, or ten percent of annual production.
EC negotiators are also likely to clarify their
proposal that export rebates be adjusted for a
period to moderate Community competition with US
grain exports in third country markets.
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Some progress can also be expected in nego-
tiations on citrus and tobacco. Community con-
cessions in these specific areas could ameliorate
long-standing and politically important bilateral
trade irritants, but they will have little impact
on US exports. Europeans, meanwhile, are attrib-
uting the continued relative weakness of the dollar
in part to expectations that the trade negotiations
will yield few significant results. The US has
tied a formal change in the price of gold to suc-
cess in the talks.
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POLAND WEST GERMANY: Normalization of rela-
tions has been strained by a slowdown in the emigra-
tion of Poland's ethnic Germans to West Germany.
Although 25,000 ethnics--more than double the
number in any previous year--were allowed to re-
settle during 1971, Bonn is concerned about the
greatly reduced rate of emigration to West Germany
toward the close of the year. Bonn Foreign office
officials claim the flow dwindled to 1,000 in De-
cember and that the current rate does not conform
to the accord reached in connection with the Warsaw
Treaty of December 1970 in view of the approximately
300,000 pending requests for emigration. In spite
of Polish reassurances, the slow pace of repatria-
tion has continued into January.
Warsaw takes the position that the departure
of so many has caused hardships for the Polish
economy. The Polish Government now is insisting,
for example, that a replacement be available for
any farmer who wishes to emigrate. The real source
of Warsaw's disenchantment, however, is the lack of
significant progress in bilateral economic coopera-
tion since the Warsaw Treaty was signed. Stalled
negotiations over the establishment of a Polish
consulate in Cologne also have served to sour bi-
lateral relations.
Red Cross representatives from both countries
will meet later this month to discuss repatriation,
but the issue is not likely to be resolved in the
near future. As the prospects dim for West German
economic concessions to Poland, Warsaw may seek to
expand trade and aid with other West European coun-
tries. Indeed, party boss Edward Gierek is sched-
uled to visit France in the spring and UK Prime
Minister Heath will go to Poland sometime this year.
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MOROCCO: King Hassan has made clear his in-
tention to continue his domination of politics,
even if the government is broadened to include op-
position party leaders.
Hassan and the National Front apparently have
reached a tentative agreement for the latter's
entry into the government. The National Front,
comprised of the conservative Istiglal Party and
the Leftist National Union of Popular Forces (UNFP),
reportedly will be allowed to select most cabinet
ministers, with the possible exception of the de-
fense and interior portfolios. Discussions are
continuing on opposition demands for parliamentary
elections and constitutional changes. The agree-
ment also reportedly provides for the return of
some exiled opposition leaders and amnesty for
UNFP members sentenced for treason last year.
Public announcement of the agreement may come
within a few weeks.
Hassan in a recent speech strongly emphasized
that the monarchy is the institution that speaks
for the Moroccan people as a whole. In an oblique
reference to the politicians, he said that "the
train of state is ready to take on board" individ-
uals willing to work for "the betterment of the
national interest." He made it clear that he in-
tends to run the "train."
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PAKISTAN: Breaks in relations with Poland,
Mongolia, and Bulgaria because of their recognition
of Bangladesh appear primarily intended to satisfy
domestic public opinion. It is not clear whether
similar action would follow recognition by a coun-
try more important to Islamabad, such as the UK or
USSR. President Bhutto has stated publicly that
there will be no automatic breaks, but public opin-
ion could force action against any nation that is
viewed as acting precipitately. In announcing the
break with Sofia, the government emphasized that
the status of East Pakistan has not yet been set-
tled, suggesting that it is seeking to delay rather
than to prevent recognition. Pakistan's decision
may give the USSR pause. Moscow hopes to maintain
its presence in Islamabad and would prefer that
some non-socialist countries recognize Bangladesh
before the Soviets follow suit.
USSR-CUBA: A Soviet ocean-going rescue tug
now nearing Cuban waters will probably relieve a
similar tug that has been supporting Soviet naval
operations in Cuba since September 1970. Two Osa-
class patrol boats arrived in Havana on 12 January
after being towed across the Atlantic. The Soviets
may conduct familiarization training with the Cubans
before the Osa's are turned over to Castro's navy.
The Kashin-class destroyer and F-class diesel at-
tack submarine that arrived in Cuba last October
continue to operate from Mariel,
(continued)
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HUNGARY: Budapest has stiffened the punish-
ment for all drug-related offenses. A new decree,
effective 1 January, provides for one to five years
imprisonment for anyone who manufactures, sells, or
transports hallucinatory drugs. A former statute
did not cover the transit of drugs across Hungarian
territory and called for a maximum sentence of only
three years. The stiffer penalties are a direct
outgrowth of the regime's greater willingness to
cooperate with other governments in suppressing
drug traffic. Although Hungary does not have an
indigenous drug problem, in recent years it has be-
come a route for transport of drugs from the Middle
East to Western Europe.
TRINIDAD AND TOBAGO: Following the lead of
the major petroleum exporting countries, the gov-
ernment is seeking a greater share of foreign-owned
oil company profits. It is now negotiating with
Texaco and Shell to increase tax rates retroactive
to 1970, and may soon attempt to increase its tax
take from other foreign-owned oil companies. During
the last two years budget strains have been growing
rapidly, mainly because the Williams administration
has been pursuing an expansionary fiscal policy to
spur economic activity. Moreover, petroleum reve-
nues have fallen from the peak 1968 level, although
they still account for one fourth of total tax re-
ceipts.
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The United States Intelligence Board on 13
January 1972 approved the following national intel-
ligence estimate:
14 Jan 72 Central Intelligence Bulletin
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Secret
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