CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A023300060001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: June 26, 2003
• Sequence Number: 1
• Publication Date: December 2, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
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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)
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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.
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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.
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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.
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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.
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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.
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*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
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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.
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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.
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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.
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