CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022300100001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: August 7, 2003
• Sequence Number: 1
• Publication Date: July 18, 1972
• Content Type: REPORT

Approved Fonaelease 2003/10/01 : CIA-RDP79T00977,0223068G1et2
25X1
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
DIA review(s) completed.
Secret
N2 041
18 July 1972
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
 25X1 Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
 Approved Fof pelease 2003/1 jci1RDP79T009 022300100001-2
No. 0171/72
18 July 1972
Central Intelligence Bulletin
CHILE: The government's by-election win could add
to growing political tensions. (Page 1)
USSR-CHILE: Moscow offers long-term credits.
(Page 2)
URUGUAY: Tupamaro deal with the government turned
awl n. (Page 3)
THE NETHERLANDS: The government loses its parlia-
mentary majority. (Page 4)
MEXICO-US: Interim agreement on salinity. (Page 5)
VIETNAM: Situation report (Page 7)
LAOS: Road improvements (Page 7)
EGYPT-USSR: T-62 tanks (Page 9)
CEYLON-CHINA: Disappointment over loan (Page 9)
CARIBBEAN: Economic cooperation with EC (Page 10)
INTERNATIONAL MONETARY DEVELOPMENTS: Finance min-
isters meeting Page 10)
MBFR: Caution Among the Allies. (Page 11)
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975A022300100001-2
 Approved FoJelease 2003/ ATRDP79T0097 022300100001-2
CHILE: The government's victory in the Coquimbo
by-election could add to growing political tensions.
The Communist candidate won the legislative con-
test on 16 July, replacing a deceased fellow party
member. Her margin of victory was smaller than that
won by the government in recent elections in that
province, but even the combined opposition was un-
able to defeat the Popular Unity (UP) coalition as
it had in the three other legislative by-elections
since Allende took power.
In counting the votes for the even more impor-
tant election for leadership of the trade union con-
federation, the results of which were announced this
weekend, the Communists and Socialists suppressed
their differences to overcome an unexpectedly strong
challenge from the Christian Democrats. There seems
little question, however, that some manipulation of
votes was involved in the seven-week-long count that
gave the Socialists a slim margin over the Christian
Democrats and enabled a Socialist to retain the po-
sition of secretary-general.
These victories, plus those in two university
elections, are encouraging the coalition to strengthen
its attacks on the opposition. President Allende
and the Communists have adopted the Socialists' more
aggressive mood since the recent breakdown of their
compromise discussions with the Christian Democrats.
The UP is stirring up public demonstrations against
the congressional opposition's impeachment proceed-
ings against the interior minister and its over-
riding of Allende's vetoes of recent legislation.
Pro-government demonstrators disrupted the work of
the Supreme Court and the congress last week.
18 Jul 72 Central Intelligence Bulletin
SECRET
25X1
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
 Approved For Relbase 2003/10/SEeA. 79T0097^2300100001-2
USSR-CHILE: Moscow has offered Santiago $260
million in long-term credits for the purchase of
machinery and other capital equipment. An addi-
tional $40 to 50 million has been provided by the
USSR and East European countries to finance curren
commercial operations, according to the Chilean
press.
Announcement of the new credits follows by
only a month the formal conclusion of a $65-million
credit from China. The new assistance represents
substantial and continuing Soviet support for both
the Allende government and the hard-pressed Chilean
economy.
The new credit offer was made public shortly
after the return from Moscow of a Chilean delega-
tion that concluded several economic agreements
that had been earlier discussed in Chile. It indi-
cates that Moscow has made a thorough evaluation
of the political and economic situation in Chile.
Important measures designed to expand trade appar-
ently also were signed during the Moscow visit.
Moscow's previous assistance to Chile has been
limited to a $50-million short-term hard currency
credit and two long-term credits totaling $97 mil-
lion for project assistance and machinery exports.
Although the latter two credits were
rovided in
p
1967 and 1971, the Chileans have just begun to draw
on them. F__ I
Central Intelligence Bulletin
SECRET
 Approved Fofpelease 2003 /SEICR 1 RDP79T0099yd022300100001-2
)URUGUAY: The Tupamaros reportedly have tried
to rya e a deal with the military and have been turned
down.
Tupa- _-
maro leaders last week offered to suspend activities
for an unspecified period of time if the armed forces
would seize control of the government and jail "vil-
lainous politicians and oligarchs." Although these
terms were clearly unacceptable to the military, the
Tupamaros may be attempting to play on recent dis-
satisfaction within the armed forces over congres-
sional criticism of counterterrorism. A group of
irate army officers has issued a proclamation stating _I
that "any action that tends to defame conduct by
members of the armed forces in their struggle against .,
subversion is treason."
The Tupamaros are obviously in need of a respite
after their losses of the past three months. They
may have decided to try a different approach to their
stated objective of forcing a military coup d'etat,
which they see as the next stage in the revolutionary
process,
18 Jul 72 Central Intelligence Bulletin
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
 Approved For -ease 2003/1(Y f?l DP79T0097 2300100001-2
THE NETHERLANDS: With the resignation of two
cabinet ministers t e Biesheuvel government has lost
its parliamentary majority. The result could be
early national elections.
Disagreement within the fragile five-party
coalition over an expected billion-dollar deficit
in next year's budget figured in the latest devel-
opment. The cabinet had been trying since 11 July
to reach a compromise. These attempts failed and
Minister of Waterways Drees and Minister of Higher
Education de Brauw, both members of the small but
pivotal Democratic Socialist Party, resigned yes-
terday.
Drees and de Brauw claim that economies intro-
duced in the budget by Biesheuvel have left them 1,x,3
with insufficient funds to run their ministries,
but they also have a broader and somewhat contra-
dictory complaint. Democratic Socialists, who ad-
vocate stringent anti-inflation measures, have long
been frustrated by the cabinet's refusal to adopt
their recommendations, particularly the institution
of wage and price controls.
With the defection of eight Democratic Social-
ists, the government's strength in the 150-member
parliament now stands at 74. Biesheuvel may try
to appease Drees and de Brauw by renegotiating the
all-party agreement on economic policy drafted a
year ago. If Biesheuvel cannot get the Social
Democrats back, the rump coalition could limp along
as a minority government. Interparty disagreement
on other issues, however, is growing. The Liberals,
like the Democratic Socialists, are disturbed about
the leftward trend and leadership in the Catholic
People's Party. Defection of the Liberals would
prompt Biesheuvel to call elections before parlia-
ment reconvenes this September.
SECRET
4
Approved For Release ~~ 003/10701
- -
 Approved For--lease 2003/1 S/r'RIRTDP79T0097O22300100001-2
MEXICO-US: The interim agreement to reduce
the salinity of Colorado River waters delivered to
Mexico should alleviate pressures on President
Echeverria from powerful agrarian interests in the
Mexicali Valley.
Farmers in the valley have long complained
that US irrigation systems have washed so much salt
out of the soil that the water reaching Mexico is
far more saline than they are willing to accept
under a treaty signed by the two countries in 1944.
Effective immediately, the US is diverting over
half of the relatively saltier drainage from the
Wellton-Mohawk irrigation project that flows into
the Colorado River and replacing it with better
quality water. This arrangement will satisfy Mexico
until the end of this year, at which time a defin-
itive solution will have to be found or the present
interim agreement extended.
Several temporary measures have been adopted
during the past decade but all efforts to reach a
permanent settlement have failed; Mexico's Foreign
Ministry has often threatened to resort to third-
settlement. Echeverria has thus far rejected
party
this approach, preferring to solve the problem bi-
laterally. The interim agreement and the designa-
tion of a special US representative to study the
matter and submit proposals by year's end for a rJ
permanent solution have led to optimism on both
sides that an agreement can be achieved this time.
The solving of this principal bilateral irritant
would considerably enhance Echeverria's political
reputation. His visit to the US was widely ac-
claimed in the Mexican media as a success an~ he
25X1
undoubtedly wants to keep this image alive.
Central Intelligence Bulletin
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975A022300100001-2
 Approved For Rdlease 2003/1 8AiC-_XIIR' RDP79T00922300100001-2
Chinese Roadbuilding in Northwest Laos
Chinese-built road Road
Trail
Muong Sing
Muong So
AAA sites
Pak Ben
25X1
SECRET
Approved For Release - -
~.-
Roadl improvemen " ~=
Muong Houn
 Approved Fo,elease 2003/1,DP79T009022300100001-2
NOTES
C VIETNAM: The heavy fighting around Quang Tri
City has temporarily subsided, but both sides appear
to be preparing for a sustained contest throughout
the area. Only small clashes northeast and south of
the provincial capital have been reported since the
weekend, presumably because government forces cur-
rently are trying to consolidate their positions and
push deeper into the province rather than merely ef-
fect a rapid recapture of Quang Tri City. The Com-
munists are relying primarily on intensive artillery
and mortar fire to slow the government drive, direct-
ing almost 1,000 rounds at government positions on
16 July alone,
~.r
LAOS: The Chinese are making improvements to
Rout between Muong Houn and Pak Beng during the
current rainy season. According to photography of
8 July, they are building bridges, and widening and
realigning the road, and they have built three anti-
aircraft weapons sites on the hills outside of Pak
Beng. There is no evidence that the Chinese are
preparing at this time to extend their roadnet into
the Nam Ou River Valley, where some survey work took
place earlier this year. No appreciable progress
was noted on the other major road construction proj-
ect between Muon Sing near the Sino-LaQtian border
and Nam Tha. F I
(continued)
18 Jul 72 Central Intelligence Bulletin 7
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975A022300100001-2
25X1
 Approved For Re Pease 2003/10 1 P79T0097 2300100001-2
T-62 Medium Tank
First observed 1961
Main armament 115mm smoothbore gun
Weight 40,2 tons
Speed 30 mph
Cruising range 310 miles
Crew 4
SECRET
25X1
Approved or a ease - -
 Approved Fofaelease 2003/1 0 C IFTDP79T0097 (022300100001-2
25X1
fELYPT-USSR: Cairo has received a second ship-
ment o T-22 tanks from the USSR, indicating Mos-
cow's willingness to meet some of President Sadat's
requests for continued modernization of the military
establishment. Thirty T-62s were unloaded in Alex-
andria in late Mayl
At least ten T-b S, t e firstcc
iverec outside the Warsaw Pact, arrived in Egypt
earlier in the year. These tanks are more advanced
and carry a more powerful gun than the T-55s that
now make up the bulk of Egypt's armor.
25X1
CEYLON-CHINA: Ceylonese officials are disap-_
points that a recent $52-million loan commitment
from China does not provide for any hard currency.
Earlier reports indicated that China had offered a
hard currency credit of at least $25 million, match-
ing a credit extended last year. Although Peking
is expected to make additional hard currency avail-
able, rumors place the amount as low as $5 million.
The finance minister says that the Chinese aid will
not be enough to meet the country's immediate budg-
etary problems and that the government will have to
adopt measures to reduce fast rising government-
subsidized food consumption expenditures, the crux
of Ceylon's problems. Such reform measures are po-
litically unpopular, however, and despite urgings
from the Western Aid Consortium, Colombo so far has
been reluctant to act.
(continued)
18 Jul 72 Central Intelligence Bulletin 9
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975A022300100001-2
25X1
25X1
25X1
 Approved For1Ze ease 2003/ RDP79T0097 12300100001-2
CARIBBEAN: Twelve Commonwealth Caribbean gov-
ernments have agreed to seek a group arrangement
with the enlarged European Communities (EC) to pro-
tect their exports, which would otherwise suffer as
Commonwealth preferences are phased out. This de-
cision was reached at the Caribbean Free Trade As-
sociation meeting held in Dominica, 10-13 July.
The group approach offers the participants--the
four independent nations of Barbados, Guyana, Ja-
maica, and Trinidad and Tobago, six associated
states, and two colonies--the best prospects in
negotiations with the EC. Effective joint bargain
ing for preferential trade arrangements could stim-
ulate additional economic cnone rafion_ I
INTERNATIONAL MONETARY DEVELOPMENTS: The
two-day meeting of finance ministers of the Ten
that began in London yesterday had a moderating
effect on the currency markets. Although the
dollar closed at or'near the floor on all major
exchanges, officials described intervention buying
as "moderate" compared with "extremely heavy" last
Friday. The effect on the market was presumably
due to the ministers' affirmation that no new de-
cisions are expected that will alter the present
measures now in force. European central banks
have purchased the equivalent of $2 billion in the
last week to keep their currencies within the lev-
25X1
Central Intelligence Bulletin
SECRET
Approved For a ease -
16
-
 Approved Fo*elease 2003/1($AC I,,XDP79T00974A022300100001-2
MUTUAL AND BALANCED FORCE REDUCTIONS (MBFR)
Recent discussions among the NATO allies on
how to initiate talks with the East on MBFR have
highlighted the difficulty of reconciling their
disparate interests into a coherent NATO position.
US suggestions on who should participate in the
force reduction talks and how they should be or-
ganized have been sharply questioned by the allies.
Although in part a reflection of the very real
procedural problems involved, their reaction re-
flects deeper concerns about the impact that force
reductions might have on European security inter-
ests.
Since the Soviet agreement during the Moscow
summit to join in force reduction talks while pre-
paring for a Conference on Security and Cooperation
in Europe (CSCE), the allies have become even more
cautious. All but France are prepared to move to-
ward negotiations, but they prefer that actual re-
ductions be delayed as long as possible. This sen-
timent translates into general support for West
Germany's phased approach that envisions reductions
only at the end of a lengthy process. The British
have long urged circumspection, while the French
continue to boycott force reduction planning.
Despite US reassurances, many of the allies
are nervous about US intentions. West German dis-
armament commissioner Roth complained only last
week that, whereas Bonn approached MBFR as part of
its broader Ostpolitik, he remains uncertain what
the US wants out of MBFR other than a vehicle to
combat domestic pressures for a reduction of US
forces in Europe. The director of political affairs
in Rome's foreign office, noting Italy's lack of
enthusiasm for MBFR, portrays it as a "fig leaf"
for US and West German force reductions'""(
(continued)
18 Jul 72 Central Intelligence Bulletin 11
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975A022300100001-2
 Approved For Rne ease 2003/1S.8CR]RBDP79T00975A 22300100001-2
ITh,e most immediate question facing the allies
is how to get the preliminary soundings with the
Soviet side under way. Since the summit meeting,
Soviet officials have made clear their preference
that the necessary arrangements be made bilaterally
with the US, although Soviet Foreign Minister Gro-
myko reportedly suggested to the West Germans that
two or three Western allies might contact the Soviets
as well. Moscow apparently expects the West-to make
the next move, and it will probably agree to any
procedure that does not have a bloc-to-bloc cast
and keeps MBFR sufficiently separate from the CSCE.
An even more difficult problem for NATO will
be how to accommodate the views of allies who might
not participate directly in any eventual negotia-
tions. The UK, FRG, and a few other allies agree
with the US that only those allies and Warsaw Pact
states with forces or territory involved should
participate. This would include the US, UK, FRG,
Canada, Belgium, the Netherlands, and Luxembourg
on the Western side, and the USSR, East Germany,
Poland, Czechoslovakia, and possibly Hungary on
the East. The Italians, joined by the other allies
on the northern and southern flanks, nevertheless
continue to press for representation in the explor-
atory talks.
Italy and some other allies have also been at-
tempting to link MBFR to a CSCE so that they may
make known their views on force reductions at the
security conference. Most allies sympathize with
the Italians in principle and are willing to es-
tablish at least minimal links between CSCE and
MBFR. They all favor discussion at a security con-
ference of confidence-building measures, such as
advance notification of maneuvers and exchanges of
observers. Since such measures will also be con-
sidered during MBFR talks, this would provide a
substantive link between CSCE and MBFR. The Ital-
ians, again supported by a number of other allies,
may also press for a declaration of general prin-
ciples on force reductions at a CSC7
Central Intelligence Bulletin
(continued)
.12
SECRET
111111111!"', 11 IT-, 1. ,I'll p7~ prove or a ease - -
 Approved For lease 2003/1(MCR&)P79T0097W22300100001-2
1, ~Te desire of the allies to. accommodate the
interests of their partners on the flanks and their
expectation that the Soviets will continue to pro-
mote US-USSR bilateralism on MBFR led to criticism
of the US proposals for organizing the force reduc-
tion talks in the North Atlantic Council (NAC) last
week. The US would locate the MBFR explorations in
Geneva. Most allies, however, want the MBFR talks
in the same place as the CSCE preparations and at
the same time. These are expected to begin in
Helsinki late this year.
The allies also are strongly negative about
the US formula for conducting the talks. The US
would have the NAC focus on general objectives and
strategies while a more limited group of allies
actually conducted the explorations. An ad hoc
group open to all allies would consult at the site
of the talks but would not direct the negotiating
team. Most allies feel that this arrangement would
not take sufficient account of the interests of
non-participants. They appear to favor a Canadian
proposal that a force reduction "policy board" open
to all allies be established in Brussels. A smaller
group would conduct the explorations, receiving
guidance from the board.
Despite more than two years of study and debate
within the alliance, many substantive aspects of
MBFR remain in dispute. For example, the allies do
not have established positions on such basic ques-
tions as the relationship between reductions of
foreign and indigenous forces, what to do with the
equipment of reduced units, and how to deal with
tactical nuclear weapons and their delivery systems.
With explorations not far away, the allies will have
to work at an uncommonly rapid pace to get them
ducks in a row. A number of allies, particularly
18 Jul 72 Central Intelligence Bulletin 13
SECRET
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2
 Approved Fo"r Release 2003/1 'C jl-'!bP79T009 22300100001-2
FRG, are pressing for an early revision of the
"Brosio mandate" that was prepared last fall to
guide the abortive MBFR mission to Moscow of former
NATO secretary-general Brosio. This question will
be addressed in the NAC tomorrow, as will the US
and Canadian proposals for exploratory talks.
18 Jul 72 Central Intelligence Bulletin
SECRET
25X1
-xpprovqa or -
 Approved Foelease 2003/10/01 : CIA-RDP79T009/022300100001-2
Secret
Secret
Approved For Release 2003/10/01 : CIA-RDP79T00975AO22300100001-2