CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A021100020001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: April 9, 2003
• Sequence Number: 1
• Publication Date: January 31, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 042
31 January 1972
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No. 0026/72
31 January 1972
Central Intelligence Bulletin
PAKISTAN - BRITISH COMMONWEALTH: Pakistan's deci-
sion to sever ties with t e Commonwealth will have
little impact on recognition of Bangladesh by other
states. (Page 1)
MALTA-UK-NATO: The latest talks in Rome made prog-
ress, but agreement on specifics is still lacking.
(Page 3)
JAPAN-CHINA: Japanese leaders are privately cau-
tious about the prospects for normalization of re-
lations. (Page 4)
GHANA: The military junta is hesitant and uncer-
tain after two weeks in power. (Page 5)
USSR: Moscow is reportedly planning to sell $600-
700 million of gold this year. (Page 6)
CHILE-CHINA-USSR: Peking extends $65 million in
economic aid to Chile soon after the arrival of a
strong Soviet economic delegation in Santiago.
(Page 7)
LAOS: Military situation (Page 9)
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PAKISTAN - BRITISH COMMONWEALTH: Pakistan's
announced decision to sever ties with the Common-
wealth as a result of the planned recognition of
Bangladesh by Britain, Australia, and New Zealand
will probably be popular domestically but will have
little impact on recognition by other states.
The proclamation over Radio Pakistan yesterday
followed warnings from Australia and New Zealand
that they intended to recognize Bangladesh today
and indications from London that the British would
extend recognition on 4 February. The British ap-
parently chose that date to accommodate President
Bhutto's request that recognition be postponed at
least until after his return from a brief visit to
Peking, which begins today. Foreign Secretary Home
arrives in New Delhi on 5 February, and London be-
lieves that recognition after that date could. be
interpreted as yielding to Indian pressure.
Neither the Pakistani Government nor the people
were satisfied with the attitude of the British and
the major Commonwealth countries during the recent
war with India. The Bhutto government's swift and
decisive announcement that Commonwealth ties were
being severed should be generally welcomed by a
public that had become disillusioned with the prior
government's indecisive and inept performance during
the latter part of 1971.
The only Commonwealth countries which have thus
far recognized Bangladesh are India, Barbados, and
Cyprus. Cypriot recognition last week led the Paki-
stanis to break relations with Nicosia, as they have
done with most countries taking this step. Bhutto
has indicated, however, that he cannot afford to end
ties with "major powers," such as the USSR. Most
Pakistanis have long regarded membership in the Com-
monwealth as of little value to their country, and
it is possible that Bhutto chose to withdraw from
the organization in preference to breaking relations
31 Jan 72 Central Intelligence Bulletin
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with the more powerful members of the group. Bhutto
yesterday told a press conference that he was pre-
pared to continue bilateral relations with Britain.
Pakistan's need for economic assistance, moreover,
may determine the extent of any further reaction
to recognition moves by the other larger states both
within the Commonwealth and in Western Europe--most
of which have supplied economic aid to Pakistan in
the past.
In the meetings last week of representatives
of the European Community countries in Luxembourg
and London, the British, hoping that mass recognition
would tend to dilute any negative reaction from
Pakistan, advocated 4 February as a common date for
recognition. France and Italy, however, have ap-
parently still not committed themselves to specific
dates.
31 Jan 72 Central Intelligence Bulletin 2
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MALTA-UK-NATO: The talks in Rome on 28-29
January made progress, but agreement on specifics
is still lacking.
The chief financial issue--the annual "rent"
to be paid to Malta--remains unresolved as Prime
Minister Mintoff continues his efforts to squeeze
more cash out of the Allies. Mintoff and British
Defense Secretary Lord Carrington agreed tentatively
to a formula that would allow the Allies to stand by
their final offer of $36.4 million annually but that
would also at least partially satisfy Mintoff's de-
sire for an immediate cash payment. The North At-
lantic Council will discuss this proposal when it
meets today.
The principal bilateral Malta-UK issue--the
terms for British-employed local labor--is still un-
settled. Working-level discussions will continue
in Valletta this week on this and other aspects of
a new defense agreement in an attempt to reduce the
number of issues that must be considered at the next
ministerial meeting in Rome on 7 February.
In the meantime, UK forces in Malta, which had
received orders to leave intact any equipment that
could be of future use to NATO, will soon begin dis-
mantling heavy. installations, including radar facil-
ities. The British have pointed out that once the
withdrawal reaches this phase it will be both costly
and difficult to reverse. London, nevertheless, be-
lieves the process must continue in order to keep
pressure on Mintoff to come to terms.
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JAPAN-CHINA: Japanese leaders are publicly
pressing for government-level talks with Peking,
but privately they remain cautious about the pros-
pects for normalization of relations.
In wide-ranging policy speeches to the Diet,
which reconvened on 29 January, Prime Minister Sato
and Foreign Minister Fukuda both called for direct
negotiations with the Chinese. Sato acknowledged
Japan's close ties with Taipei since World War II
but noted that Peking has been admitted to the UN
and that normalization should now be "on the basis
of realization that China is one."
Foreign Minister Fukuda, who as a leading con-
tender to succeed Sato is extremely sensitive to
the domestic political ramifications of the current
China mood in Japan, termed normalization of rela-
tions "the most important problem for future Japanese
diplomacy." Perhaps in an effort to appear more
forthcoming than Sato, Fukuda avoided mention of
Taiwan and appealed to Peking to tackle the issue
seriously through direct government-to-government
talks. At least one press report indicates that
the Japanese have already sounded out the French
about holding ambassadorial talks with the Chinese.
During his visit to Tokyo in mid-January Foreign
Minister Schumann reportedly offered his good of-
fices for arranging a meeting in Paris.
While most leaders of the ruling Liberal Demo-
cratic Party have concluded that diplomatic ties
must be established with Peking, there is still un-
certainty over the pace at which Japan can proceed.
This pessimism probably results in large part from
Peking's previous public denunciations of Sato
personally and indications of Chinese unwillingness
to come to terms with Japan as long as he is prime
minister. F77 I
Central Intelligence Bulletin
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GHANA: The military junta. seems hesitant and
uncertain after two weeks in power.
Apparently unable to agree on a slate of ci-
vilian department heads as it had promised, the
junta has appointed 12 military officers and only
one civilian as ministerial commissioners. Junta
leader Acheampong holds the key defense, finance,
and economic affairs portfolios. The sole civilian
department chief is Attorney General Moore, presi-
dent of the Ghana Bar Association. Aside from
Moore, none of the new commissioners appears to
have any real expertise in his field of responsi-
bility.
These appointments should lessen some of the
confusion that has prevailed among civil servants
who had been running the ministries since the coup.
They have not dispelled questions about policy
lines, however, which remain extremely fluid. The
junta still seems open to suggestions by civilians,
and various politicians continue to maneuver for
influence, including some associated with the left-
ist Nkrumah regime ousted six years ago.
Although the junta seems securely in power,
Accra is rife with rumors of counter-coup activity.
The military is extremely sensitive to these rumors
and temporarily detained a journalist who filed a
report on the arrest last week of several junior
officers suspected of plotting. The junta has also
ordered the police to re-arrest all the key members
of former Prime Minister Busia's banned political
party who had been released shortly after the coup.
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USSR: Moscow is reportedly planning to sell
$600- 700 million of gold this year.
A lecturer in Leningrad recently claimed to
have been briefed on this plan by a deputy chairman
of the State Planning Commission. Although there
is no evidence to substantiate the report, the com-
bination of hard currency stringencies, substantial
external indebtedness, poor export prospects, and
mounting gold reserves suggests that a resumption
of gold sales of this magnitude is possible. The
high price of gold--currently $47.35 an ounce on
the free market--may be an additional incentive to
sell.
The Soviets have limited the sale of gold since
1965. Gold stocks had been drawn down to roughly
$1 billion in order to finance plant and equipment
imports and to pay for large purchases of wheat in
1963-65. Since that time gold reserves have risen
to an estimated $2 billion.
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CHILE-CHINA-USSR: Peking's extension of $65
million in economic aid to Chile, the largest single
Communist credit ever extended there, follows hard
upon the arrival of a strong Soviet economic dele-
gation in Santiago.
Foreign Minister Almeyda disclosed the Chinese
credit in a speech reviewing Chile's position on
the eve of talks with 17 creditor nations on rene-
gotiating Santiago's debt. He implied that the Chi-
nese assistance is in the form of hard currency on
a short-term basis, the type of financial aid Chile
most urgently needs. Moscow reportedly extended
$50 million in foreign exchange to Santiago late
last year under similar terms.
A high-level Soviet economic mission arrived
in Chile on 26 January for an extended stay to work
out the details of the several economic agreements
between the two countries; two of these pacts date
back to 1967. The composition of the delegation,
which includes representatives of the State Planning
Commission and specialists in foreign trade and in-
dustry, suggests that Moscow is undertaking a
thorough examination of the Chilean economy. So-
viet economic credits to Chile amount to more than
$90 million, but so far little other than survey
work has been accomplished.
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LONG TIENG AREA
40 Government-held location
Communist-held location
o Highpoint
0 5
Miles
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C LAOS: Military activity was at a moderate
level over the weekend. A 20- to 30-man North Viet-
namese force attacked a government outpost on the
western portion of Skyline Ridge on 28 January but
was driven off. Similar probes were reported from
the Sam Thong area on 30 January. The Communists
are continuing to direct recoilless rifle and mortar
fire against irregular positions.
Four of the eight battalions of irregulars from
the Savannakhet area are scheduled to return to
south Laos for rest and reorganization on 31 January.
These units suffered casualties of about 25 percent
in the recent fighting on Skyline Ridge, and govern-
ment commanders agree that their fighting effective-
31 Jan 72 Central Intelligence Bulletin 9
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Secret
Secret
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