CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A023900040001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: August 11, 2003
• Sequence Number: 1
• Publication Date: February 27, 1973
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
41
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Centql Intelligence Bullet
CONTENTS
LAOS: Fighting con inues to decline. (Page 1)
CHILE: Government fo d distribute scheme in
trouble as election ne rs. (Page
CHINA: Renewed effort t orga ze youth. (Page 3)
ICELAND: Inflation could /gger fall of govern-
ment coalition. (Page 4)
MALAGASY REPUBLIC: Demon tratons over French
base aggravate tensions./ (Pag 5)
MAURITANIA-FRANCE: llations rec fined as Nouak-
chott withdraws from franc zone. \(Page 7)
URUGUAY: Leftist 4oalition divided \ver military
role. (Page 9)
EUROPEAN SECURITY CONFERENCE: Moscow ma_.have
scaled own expectations Page 10)
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FPt-E
/LAOS: The level of fighting continues to de-
cline amid signs that some North Vietnamese units
believe they will be returning home soon.
In the south, only minor clashes near Khong
Sedone and Thateng and isolated shellings west of
Paksong have marred the cease-fire during the past
two days. Communist troops in the central panhandle
on 25 February attacked a government unit along
Route 13 north of Thakhek for the second time in
three days and again forced the irregulars to fall
back. Near Muong Phalane, however, North Vietnamese
troops told villagers in the area that some units
would be leaving as soon as Pathet Lao replacements
arrived. In the area of the Plaine des Jarres, Com-
munist gunners continued to shell government posi-
tions in the hills near Xieng Khouangville on 25
February. F77 I
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CHILE: The government's politically motivated
pla o move large stocks of food to low-income con-
sumers just before next Sunday's elections is in
serious difficulties.
The politicians who now control food distribu-
tion are resisting all efforts by Air Force General
Bachelet to organize an effective national system.
Despite the fact that Bachelet was appointed by
President Allende to do just that and that he has
Communist support for his plans, the Socialists have
been able to prevent dismissal of even the most cor-
rupt and incompetent of the present administrators.
Pushing their increasingly hard line, they are
blaming the military for the failure of the supply
scheme. They are also collaborating with other ex-
tremists in inciting slum clashes over the alloca-
tion of food, possibly in an effort to disrupt the
election by violence.
Even if some temporary solution can be devised,
the delay has stirred up Communist and Socialist
animosities, never far below the surface, and prob-
ably has lost votes for goverment candidates.
I I
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CHINA: Peking has announced the formation of
the first province-level Young Communist League (YCL)
committee since the party's youth auxiliary was dis-
mantled during the Cultural Revolution.
An editorial in the official party newspaper,
People's Daily, on 22 February hailed the establish-
ment a new YCL committee in Shanghai, a city with
provincial status, and promised that other provinces
would soon follow suit. Although the editorial was
lenient toward the past mistakes of over-zealous
young people, it was clear that the refurbished
league will keep youth on a short rein, enrolling
new members "very, very carefully." Red Guards,
young activists given license to bring down the es-
tablishment during the Cultural Revolution, will
maintain a separate organization, politically less
prestigious but apparently not subordinate to the
party's youth auxiliary. The league is responsible
for mobilizing young people in general, but has been
given direct control only over the Little Red Sol-
diers, the children's organization that has perma-
nently supplanted its pre-Cultural Revolution fore-
runner.
Reconstructing the Youth League, a process that
has been delayed because of more pressing political
problems, will allow the party to re-establish tra-
ditional lines of control over troublesome young
people. Youthful indiscipline has been a chronic
problem since the freewheeling days of the Cultural
Revolution. Official propaganda frequently com-
plains of indiscipline among young factory workers,
I Al-
though the return to organizational discipline is
seen in some official circles as a device to hand-
cuff young people, moderates in the leadership view
the league as an instrument to channel youthful
energies toward party-directed goals. Moreover, it
is an important source of new recruits for the party,
a notion that China's aging leadershi must keep in
mind in planning the arty's future.
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ICELAND: Pending wage-price hikes could fur-
ther swell the burgeoning inflation and trigger the
fall of the already unstable coalition government.
The cost-of-living jumped about 17 percent in
the past year, with food prices increasing almost
18 percent and the housing index rising over 21 per-
cent. During the same period wages shot up 18 per
cent, mostly in cost-of-living adjustments. In the
absence of legislative controls, private sector
wages will increase another 12 percent and govern-
ment employees' pay 14 percent on 1 March.
The fishing industry, the mainstay of the econ-
omy, has serious problems. Costs are rising and
catches are declining. The volcanic eruption on
Heimaey Island forced the evacuation of Iceland's
largest fishing town and at least temporarily knocked
out about 17 percent of the industry's processing
capacity. Although recent devaluation of the krona
should benefit exports, it also will raise import
prices and thus add further inflationary pressures.
Hannibal Valdimarsson, leader of the Organiza-
tion of Liberals and Leftists (OLL)--a partner in
the left-center coalition--nearly brought down the
government last December when he demanded devalua-
tion of the krona as a hedge against inflation. The
other coalition parties agreed to the devaluation
despite their campaign pledge to hold the line. The
OLL might use the current economic difficulties as
an excuse to desert the coalition, which has gained
a reputation for fiscal irresponsibility. Valdi-
marsson apparently hopes new elections would result
in a right-center coalition, uniting his party with
the opposition Social Democrats and the Independence
Party. Oppose n leaders reportedly favor this type
of coalition.ch a government would pursue a mod-
erate policy vis-a-vis the US in base negotiations
as well__A toward the British in the fishing limits
dispute.
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MALAGASY REPUBLIC: Demonstrations over the
eeken in the port city of Diego Suarez, the head-
weekend-7-n-
quarters of French military forces in the Indian
Ocean, have aggravated an already difficult domestic
situation.
The demonstrators, most of whom were apparently
members of Madagascar's coastal tribes, were protest-
ing a possible move to end the French military pres-
ence on the island. The French base provides jobs
and incomes for a large number of coastals. Opposi-
tion to the base comes mainly from students and
workers, mostly members of the Merina tribe of cen-
tral Madagascar whose demonstrations in Tananarive
last May led to the replacement of former president
Tsiranana by a military-civilian government headed
by General Ramanantsoa.
The question of the future status of Diego
Suarez is one of the major issues in current nego-
tiations under way in Paris on revision of French-
Malagasy cooperation agreements. The French are
reluctant to surrender rights to Diego Suarez,
while the Malagasy are increasingly insistent on
asserting their sovereignty over the base. The talks
are deadlocked because of what the French consider
excessive and unrealistic demands on the part of
the Malagasy. The Malagasy Government, already sus-
picious of the French role in encouraging tribal
divisions, will probably conclude that the French
provoked the riots in an effort to influence the
outcome of the base talks.
The demonstrators also protested educational
reforms that the coastals believe benefit mainly
the Merina. Coastal dissatisfaction with educa-
tional policy led to tribal clashes in another ma-
jor port city last December. In addition, many
coastals view the Ramanantsoa government as an in-
strument for imposing Merina domination on the is-
land because a large number of ministries are held
by Merina. (continued)
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Tribal tensions and a faltering economy have
already produced considerable unrest. One major
coastal political figure, former vice-president
Andre Resampa, has called for the replacement of
Ramanantsoa's government by a provisional govern-
ment composed of the island's major political par-
ties. Resampa's demand is indicative of a growing
feeling on the part of many Malagasy that Ramanantsoa
has allowed events to drift without coming forward
with precise policies to calm tribal passions or
deal with conflicting demands for reforms from the
island's factionalized political groups.
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MAURITANIA-FRANCE: The new cooperation agree-
ments, signed recently in Nouakchott and replacing
those in existence since 1960, have redefined formal
relations between the two countries.
The three agreements cover economic relations
and technical and cultural cooperation. Paris'
continued refusal to grant Mauritania an operations
account with the Bank of France, together with
Mauritania's previously announced decision to es-
tablish a national currency, has ensured Mauri-
tania's formal withdrawal from the franc zone.
Tripoli, meanwhile, has offered a substantial
drawing account with the Bank of Libya. Future
French economic assistance will be on a project-
by-project basis, but the issue is complicated by
an unresolved debate among French officials re-
garding the extent of changes to be made in the
kind of assistance Nouakchott will receive. The
French Finance Ministry insists that because of
these recent monetary decisions Nouakchott can no
longer be given capital assistance and should be
limited to grants for studies and technical as-
sistance. Secretary of State for Cooperation
Billecocq supports less restrictive terms in line
with his advocacy of a more open and flexible
policy toward France's client states.
The accord on cultural cooperation provides
for continuing French educational assistance while
permitting Mauritania to give education a more
national character, primarily by abolishing the
requirement for equivalency between French and
Mauritanian diplomas. The technical agreement
describes the status of French civilian technical
assistants and is believed to provide for a re-
duction in the number of technicians.
The two sides failed to reach agreement on
military cooperation. Mauritania refused to grant
France military overflight rights and asked for
the withdrawal of all French military advisers in
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response to the French insistence that the con-
tinuation of the advisory mission depended on con-
cessions to the French position on overflights.
The differences of opinion on military issues
created considerable rancor, in contrast to the
amicable negotiations on the other accords.
The new agreements largely satisfy Ould Dad-
dah's desire to acquire full sovereignty for Mau-
ritania, while retaining friendly relations with
France. He has publicly praised the accords, but
he also cautioned that Mauritanians will have to
accept some economic sacrifices in return for
achieving control over their economy.
As a precedent for negotiations with other
African countries, the accords seem to indicate
that while France is prepared largely to satisfy
African demands regarding cultural and technical
assistance, Paris will maintain its traditionally
conservative policy in the monetary area.
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URUGUAY: The viability of the leftist Frente
Amp o coalition appears to have been seriously
threatened by internal differences over the mili-
tary's virtual take-over of government.
The split has pitted the two stronger pro-mil-
itary members of the coalition--the Communist and
Christian Democratic parties--against several minor-
ity parties, whose reservations about the military
revolt against President Bordaberry were apparently
ignored at the height of the crisis. A split in the
coalition reportedly developed when several of its
senators walked out of the rally on 9 February at
which its principal spokesman, retired General Libes
Seregni, called for the resignation of Bordaberry.
Seregni's speech was taken to be a show of leftist
support for the military.
Should Frente Amplio's internal differences
force it to disband, the military will find its po-
sition in dictating to the civilian government fur-
ther strengthened. It will also, however, gain a
vocal and perhaps unwanted ally on the extreme left.
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NOTE
EUROPEAN SECURITY CONFERENC : The third ses-
sion of preparatory talks for a Conference on Se-
curity and Cooperation in Euro e opened in Helsinki
yesterday afterN4 two-week re ess. At the two
previous sessionsvarious a nda proposals were
gathered into four `basket ," and hard bargaining
will now take place i?n effort to reconcile dif-
fering Soviet and Weste approaches. The West
wants the agenda spelle t in some detail before
commitments are made o que tions of the timing
and location of the a tual co ference. So far
this position has pr vailed. A a result, Soviet
officials have expr ssed disappo tment over the
slow pace of the t lks. Moscow ap ears to have
scaled down its e rlier inflated ex ctations of
what can be acco plished at a confere ce, and will
probably conce rate on obtaining West rn agree-
ment on what regards as the central i ues: en-
he principles of inviolabili y of
dorsement of
It;
frontiers and non-use of force and a roval of a
post-conference consultative organ.
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