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December 14, 2016
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June 26, 2003
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December 2, 1972
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Approved For Release 2003/08/05: CIA-RDP79T00975A023eC,e1-6 25X1 DIRECTORATE OF INTELLIGENCE Central Intelligence Bulletin Secret N2 42 Approved For Release 2003/08/05 : CIA-RDP79T00975A023300060001-6 25X1 Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 Approved For Release 2003/R R AI:RDP79T00975A023300060001-6 No. 0289/72 2 December 1972 Central Intelligence Bulletin SOUTH VIETNAM: Communist cadre told North Vietnamese forces will stay in South after cease-fire. (Page 1) INDIA-US: New Delhi signals interest in restoring good relations. (Page 2) USSR-CHILE: Allende to seek aid during Moscow visit. (Page 3) URUGUAY: Congress extends suspension of civil rights. (Page 5) FINLAND: Political rivalries will delay signing of EC accord. (Page 6) MEXICO: Echeverria proposes new controls on foreign investment. (Page 8) JAPAN: Largest monthly wholesale price jump in seven years (Page 9) Approved For Release 2003/ IQCJCEA' DP79T00975A023300060001-6 Approved For Release 2003/OWTIHEA-RD ,1, P79T00975A023300060001-6 SOUTH VIETNAM: The Communists are telling their cadre in the South that the bulk of North Vietnamese troops will stay on in South Vietnam under one guise or another following a cease-fire. Most accounts indicate that the North Viet- namese forces will be broken down and dispersed in smaller-sized units, from squad to battalion size, and will be put under ostensible control of the National Liberation Front military apparatus. Some reports claim that the larger-sized North Viet- namese elements will be hidden in safe base areas pending new orders. Other reports indicate that smaller North Vietnamese elements will operate with the Viet Cong units and help in the coming "political struggle." The reports suggest that the Communists plan to be flexible on the role of the North Vietnamese, tailoring their activities to local needs. In briefing the cadre on the role of the North Vietnamese after a cease-fire, the Communist hier- archy appears also to be seeking to reassure the Viet'Cong that they will not be deserted and left more vulnerable to government pressures. Many of the briefings continue to assert, in fact, that the Communists plan to renew their military effort sometime after the cease-fire to win control of the country. The timing and nature of this action are still very vague, however, and the claims of a general military offensive at this point may be largely for morale-buildinctpurposes. 2 Dec 72 Central Intelligence Bulletin DP79T00975A023300060001-6 Approved For Release 2003/O9V IA-P Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 SECRET INDIA-US: Foreign Minister Swaran Singh's parliamentary statement on 30 November may represent a significant signal about India's interest in im- proving relations with the US. Singh's conciliatory speech follows a series of restrained but friendly gestures during November. These included an unusually balanced statement re- garding US efforts to achieve a Vietnam peace set- tlement and Prime Minister Gandhi's cordial con- gratulatory message to President Nixon on his elec- toral victory. Since Parliament convened in mid- November, government spokesmen have tried to play down some of the earlier charges by Mrs. Gandhi and other high-level officials accusing the CIA of in- terfering in a wide range of Indian political and economic affairs. Moreover, Foreign Secretary- designate Kewal Singh has expressed his interest in restoring good relations and should be able to deal with Americans more easily than his mercurial, pro- Soviet predecessor, T. N. Kaul. The shift in the Indian attitude toward the US stems from various factors. Economic difficul- ties, including food shortages, probably are causing Indian officials to realize they may again have to seek wheat in the US market. New Delhi may also be trying to offset pressure from Moscow for closer Indo-Soviet cooperation and, by emphasizing its independence from Moscow, to keep the way open for normalization. of relations with China. Finally, the Indian Government probably hopes that re-estab- lishment of cordial relations with Washington will make a resumption of US arms deliveries to Pakistan less likely. Central Intelligence Bulletin 25X1 Approved For Release 2003/08/05 SECRET CIA-RDP79TOO975AO23300060001-6 Approved For Release 2003/g 5RCRPi RDP79T00975AO23300060001-6 USSR-CHILE: Chilean President Allende goes to Moscow on 5 December with some hope of receiving substantial Soviet assistance. There are indica- tions, however, that the USSR will continue its cautious approach to aiding Chile. Soviet press treatment of the visit, scheduled to last four days, has thus far been circumspect. The press did not even note that Allende was coming until 30 November, and the date of his visit has still not been mentioned. Two other Chilean dele- gations which may have laid the groundwork for the Allende visit, however, were warmly received. Chilean Communist Party Secretary-General Corvalan arrived in Moscow on 15 November, and a Chilean commercial-financial mission arrived four days later. Soviet media gave considerable coverage to Corvalan's meeting with Brezhnev and other top So- viet officials on 22 November. Brezhnev reportedly assured Corvalan of Moscow's continued "all-round support" and spoke of "consolidating political, trade, and economic ties." The Soviet leaders noted current Chilean problems, citing the attempted embargo of copper in particular, but voiced "con- fidence" these would be overcome. During Allende's two years in office, similar assurances of Soviet backing have often appeared. With the exception of one $50-million allocation of hard currency, however, economic aid from Moscow has failed to answer Chile's most urgent needs, especially in terms of the hard-currency credits Allende requires. 2 Dec 72 Central Intelligence Bulletin Approved For Release 2003/SSRC F RDP79T00975AO23300060001-6 Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 SECRET Moscow has no pressing need for copper, however, and substantial hard-currency assistance to Chile at this time seems unlikely. Moscow has reportedly shown greater willingness to provide Chile with military equipment. Various sources indicate that about $300 million in credits for military purchases has been offered on very favorable terms. Allende's entourage will include a high-ranking military of- ficer, but the bulk of the military is probably not inclined to become dependent on Soviet equipment. 2 Dec 72 Central Intelligence Bulletin 25X1 25X1 25X1 25X1 Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 SECRET Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 SECRET URUGUAY: Congress has extended for another 75 days the suspension of constitutional guarantees, enabling the army to continue its countersubversive campaign against the Tupamaros. Tensions between the military and civilian pol- iticians appear to have relaxed with the release from jail of Colorado Party leader Jorge Batlle, who is under indictment for making a speech criticizing the armed forces. Military authorities have also failed to press for immediate action against Blanco opposi- tion senator Wilson Ferreira, who recently provoked the navy by publicly criticizing the government for allowing Argentine ships to fish in Uruguayan waters. Despite these concessions, military commanders-- especially within the army--continue to press for correction of economic abuses. Earlier this week President Bordaberry announced his intention to give the military a greater role in his government. Although he made no specific appointments, he prob- ably plans to assign officers to positions in Uru- guay's numerous regulatory agencies and public en- terrises at the end of this year or early in 1973. 2 Dec 72 Central Intelligence Bulletin SECRET Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 Approved For Release 200 3 (6 ? 1 -RDP79T00975A023300060001-6 *FINLAND: Partisan rivalries over domestic issues Ws-ill apparently force Helsinki to delay sign- ing the draft free trade agreement with the EC un- til sometime next year. Nearly all of Finland's eight political par- ties are angling for support on their favorite is- sues as their price for signing the EC agreement. The situation is further complicated by the attempt of Socialists and Centrists in the four-party coali- tion to link EC treaty legislation with exceptional legislation automatically extending President Kek- konen's term in office. Kekkonen's continuation as president would act as a form of guarantee to Mos- cow that Finland would not permit its economic ar- rangements with the EC to grow into political ties. While most parties will eventually support the EC arrangement, they are genuinely divided over how to proceed on the presidential issue. After several long inter-party negotiating sessions on the troublesome issues earlier this week, Social Democratic Prime Minister Sorsa and Centrist Foreign Minister Karjalainen agreed that the situation was "critical." Representatives from all Finnish parties met again yesterday to consider the "presidential question." If a satisfactory formula for extending Kekkonen's term is worked out, movement on EC and other issues might follow. A stalemate, on the other hand, could bring down the government for the third time since October 1971. In the meantime, the Finnish trade minister announced on 28 November that his government was prepared to negotiate temporary arrangements with Denmark and Britain to protect Finnish exports un- til an EC agreement is signed. The current arrange- ment covering such exports expires on 31 December, and Finnish press estimates suggest it may take several months to resolve the EC issue. Both London and Copenhagen responded by demanding that the Finns Central Intelligence Bulletin Approved For Release 2003/0 R1E- DP79T00975A023300060001-6 Approved For Release 2003/0 g! TRDP79T00975A023300060001-6 announce a definite date for signing the agreement before any discussions concerning an interim arrange- ment will be considered. The government is also beset by opposition from the Finnish Communist Party and other staunchly anti-EC elements. The Communists will probably hold out for some sort of arrangement between Finland and CEMA as recompense for abstaining on the EC is- sue. Thus far, President Kekkonen has not intervened in the EC dispute, probably hoping that the succes- sion question would be cleared up first. But the government has become increasingly hamstrung on ancillary issues, and presidential intervention now may be necessary to restore movement. Kekkonen has worked long and hard to arrange the EC agreement, and he is unlikely to allow it to slip away because of domestic wrangling. *Because of the shortage of time for preparation of this item, the analytic interpretation presented here has been produced by the Central Intelli- gence Agency without the participation of the Bureau ol' Intelligence and Research, Department of State. Central Intelligence Bulletin 25X1 Approved For Release 2003/0~ : IA-RDP79T00975AO23300060001-6 Approved For Release 2003/O 5U' JDP79T00975A023300060001-6 9E El' MEXICO: President Echeverria is proposing more controls on foreign investment. He plans to send draft legislation to Congress that would establish a new cabinet-level group to "guide foreign investment" by ensuring that Mexico accepts only those investments that it really needs. The inter-ministerial group would encourage domestic private investment by giving financial and technical support to Mexican businesses that are in danger of being bought out by foreign interests. The law re- portedly would also give the government authority to buy back Mexican businesses already sold to for- eigners. This proposal complements one already under consideration by the legislature that would give the government substantial control over the issuing of contracts to transfer technology between com- panies in Mexico and foreign firms. It lists sev- eral conditions under which the licenses covering foreign-owned trademarks, patents, and technical services can be regulated. Congress is expected to approve this law before the end of the month. The proposed laws and the recent talk of eco- nomic reforms are not designed to produce drastic changes in economic policy. The government has no intention of seriously disrupting the vital flow of foreign investment and know-how. The Echeverria administration, however, is willing to take certain risks in order to curb the growth of foreign eco- nomic influence and the already large yearly out- flow of foreign remittances. Implicit in all this is an assertion of economic independence and an at- tempt to end what officialdom views as foreign ex- ploitation. The staunchest advocate of economic nationalism, Patrimony Secretary Flores de la Pena, who may sit on the new cabinet committee, appears convinced that the government must provide more protection for Mexican interests, both private and public. 2 Dec 72 Central Intelligence Bulletin 8 Approved For Release 2003/OfiIDP79T00975A023300060001-6 Approved For Release 2003/g5RpJRDP79T00975A023300060001-6 NOTE JAPAN: Wholesale prices rose by an estimated 1.5 percent during November, the biggest monthly increase in seven years. The inflationary pressure reflects unexpectedly fast recovery from the eco- nomic slowdown that ended earlier this year and probably is being reinforced by the increased li- quidity stemming from Japan's large balance-of-pay- ments surplus. Government spending under the large supplementary budget recently passed by the Diet will aggravate the situation but., if prices rise too fast, the Bank of Japan can be expected to adopt tighter monetary policies. So far it has been reluctant to do so for fear of slowing the economic recovery. Central Intelligence Bulletin Approved For Release 2003/0-R1i-RDP79T00975A023300060001-6 25X1 Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6 Secret Secret Approved For Release 2003/08/05 : CIA-RDP79T00975AO23300060001-6