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Document Creation Date: 
December 14, 2016
Document Release Date: 
June 16, 2003
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Publication Date: 
July 24, 1972
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PDF icon CIA-RDP79T00975A022400030001-9.pdf170.79 KB
Approved For Release 2003/06/25 :CIA-RDP79T00975A022 003 01-9 op ecret DIRECTORATE OF INTELLIGENCE Central Intelligence Bulletin Top Secret ..~~.~ r~ 24 July 1972 Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 25X1 25X1 gpproved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Approv~d For Release 2003/06/25: CIA-RDP79T00975A022400030001-9 ~ 25X1 24 July 1972 Central Intelligence Bulletin 25X1 LAOS: Souvanna is taking, a hard line against a re- newed challenge by the rightists. (Page 4) CHILE: The government is considering a radical cur- rency reform. (Page 6) 25X1 Approved For Release 2003/06/25: CIA-RDP79T00975A0224000~0001-9 25X1 25X1 gpproved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Next 3 Page(s) In Document Exempt Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Approved For Release 2003/06/25: CIA-RDP79T00975A0224~ LAO5: The two-month struggle between Prime Minister Souvanna Phouma and rightist elements in the national assembly may be moving toward resolu- tion. An earlier compromise between Souvanna and his critics broke down. when the King reused to invest the prime minister"s government unt~,l it had re- ceived a vote of confidence in the new national as- sembly. The rightists, led by the powerful Vien- tiane-based Sananilcone family, are interpreting the King's refusal as supporting their position that under the Lao constitution the Souvanna government must resign and present a new cabinet for the ap- proval of the assembly elected last January. The Sananikones hope to force Souvanna to reshuffle his cabinet and to drop their nemesis, 5isouk, as fi- nance minister. They also hope to force Souvanna formally to resign, thus undermining the prime min- ister's argument that :his "coalition" government was invested by the 1962 Geneva Accords. Souvanna is taking a hard line against the re- newed challenge from the rightists. He has with- drawn his earlier commitment to reshuffle the cab- inet and has made it clear that under no circum- stances will he disrupt the continuity of the gov- ernment by resigning. The burden of terminating the government will thus fall on the assembly, and Souvanna appears confident that the Sananikones lack the votes to force the issue in the assembly. Souvanna has moved quickly to line up support. During a meeting on 21 July, he gained the strong backing of top military leaders--including General Kouprasith, whose influence is in the Vientiane area and who has long-standing ties to the Sanani- kone family. The generals and prominent civilian politicians are now lobbying with assembly deputies on Souvanna's behalf. The timing of the prime minister's next move will depend on how much support he calculates he has in the assembly. He has indicated that he may Central .Intelligence Bulletin 4 Apprdved For Release 2003/06/25: CIA-RDP79T00975A022~00030001-9 Approv outwait the 5ananikone5, but if the proselytizing effort goes well, he could move as early as 26 July to present his cabinet for the assembly's approval. In the unlikely event that Souvanna lost such a vote, the King would probably d' miss the assembl and call for new elections. Central .Intelligence Bulletin 5 25X1 25X1 Approved For Release 2003/06/25: CIA-RDP79T00975A0224~0030001-9 Approved For Release 2003/06/25: CIA-RDP79T00975A02240q CHILE: Presidents Allende has scheduled a rally tomorrow during which he will announce new economic policies that may include radical currency reform. economic o ~.c:ia s o e i can overn- ment are making preparations to recall currency now in circulation and to issue a limited amount. of new money. Such a move would sop up excess pur- chasing power overnigYit if, as is likely, the price structure remains uncYianged. Currency reform would be a far more effective tool than rationing to deal with mounting inflation and spreading shortages. Such a reform could be structured in a way that would protect lower income groups. It would, how- ever, have an extremely adverse effect on middle- and upper-class Chileans. Many of them have stripped their companies and farms for cash gains in expecta- tion of expropriation or other losses and still have large escudo holdings despite their vigorous efforts to convert them into goods or foreign assets. Even those wealthy citizens who legally dare to turn in these holdings would receive only a fraction of their value. The only way the Allende government can suc- cessfully institute its currency reform is by ad- ministrative fiat. Congress is controlled by op- position parties whosE~ financial resources would be severely affected. Moreover, public knowledge of the government's p:Lan would trigger a nation- wide panic and aggravate alread severe shorta es of oods and forei n exchange. 24 Jul 72 Central Intelligence Bulletin Approved For Release 2003/06/25: CIA-RDP79T00975A0224g0030001-9 25X1 25X1 25X1 gpproved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Next 1 Page(s) In Document Exempt Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 25X1 Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9 Top Secret Top Secret Approved For Release 2003/06/25 :CIA-RDP79T00975A022400030001-9