CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024600110001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: October 29, 2003
• Sequence Number: 1
• Publication Date: June 13, 1973
• Content Type: REPORT

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Central Intelligence Bulletin
State Department review completed
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N2 040
13 June 1973
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No. 0141/73
13 June 1973
Central Intelligence Bulletin
MEXICO: Echeverria considers applying for observer
status in CEMA. (Page 1)
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SPAIN: New cabinet may be more rightist than its
predecessor. (Page 4)
YUGOSLAVIA: Government reacts to criticism by easing
belt-tightening measures. (Page 5)
SUDAN: Prosecution of BSO terrorists will begin
next week. (Page 7)
WEST GERMANY: Record trade surplus predicted.
Page 7)
JAPAN-CUBA: Tokyo may lift ban on credits. (Page 8)
USSR: Record planting of spring grains. (Page 8)
CUBA - LATIN AMERICA: Efforts to end Cuba's iso-
lation given new impetus. (Page 9)
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MEXICO: The Echeverria government may be con-
sidering applying for observer status in the Council
for Mutual Economic Assistance (CEMA).
On 3 June, Pravda had quoted Mexican Deputy
Foreign Secretary Jose Gallastegui as saying that
his government favored the idea of observer status
in CEMA. Gallastegui, now in Prague after a CEMA
meeting held there from 5 to 8 June, may be opening
negotiations.
The USSR and its East European allies recently
have been trying to establish stronger economic
links with non-Communist nations through CEMA. In
addition to Finland, which recently became the first
non-Communist country to conclude an agreement with
CEMA, Iraq, Iran, and India have been approached in
the recent past.
Mexican participation in the Soviet--led CEMA
would be in line with Echeverria's more aggressive
foreign policy, and his desire to be more independ-
ent of US influence in the world economic arena.
He probably intends to try to establish ties with
any nation or economic grouping, regardless of its
ideological orientation, that offers opportunities
to exhibit this independence. Echeverria would
also hope that association with CEMA would increase
Mexican exports, although significant increases in
the current low level of trade with Communist coun-
tries would not be likely soon.
13 Jun 73 Central Intelligence Bulletin
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SPAIN: The cabinet to be sworn in today under
Premier Carrero Blanco may tilt even more to the
right than its predecessor. It will have a more
balanced representation between adherents of the
Catholic lay organization Opus Dei, who predominated
the outgoing cabinet, and elements of the National
Movement, the only legal political organization.
The Opus Dei representation slipped from eight
to seven members, and its most flamboyant member,
Lopez Bravo, was dropped as foreign minister. His
replacement, however, is another dedicated Opus Dei
member, economist and former planning minister Lopez
Rodo. Conservative representation, particularly
from an increased number of ministers drawn from the
National Movement, rose from five to six. The re-
maining six ministers may at times support either
the Opus Dei or National Movement faction.
The dismissal of some cabinet members who had
policy or personality clashes with their colleagues
should produce greater cohesion. The ministers of
interior, justice, and education were dropped be-
cause of their failure to cope with problems in their
areas of responsibility. The new cabinet is likely
to take severe measures against those who protest
injustices in Spain.
Foreign policy will reflect the commitment of
the new foreign minister to the objective of Spain's
integration in Western Europe. Although Lopez Rodo
is generally well disposed toward the US, he is also
a tough negotiator and a firm defender of Spanish
economic interests. Thus, the Spanish position on
bilateral issues with the US may become more rigid.
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YUGOSLAVIA: The federal government, reacting to
strong criticism of its economic belt-tightening pro-
gram, is moving to ease controls on growth. Contin-
uing complaints, with overtones of Croat nationalism,
complicate the government's task.
The economic stabilization drive, initiated last
January to restore financial liquidity and halt infla-
tion, has been only partially successful. Although
irrational investment was reduced and workers' salaries
were frozen, inflation continued to grow at an annual
rate of about 20 percent. Forecasts of a politically
damaging drop in the standard of living and grumbling
from the republics and trade unions forced Belgrade
to shift gears. Last week the cabinet announced the
wage freeze would end on 1 July and other measures
would be taken to revive the sluggish economy. Workers
in one factory greeted the announcement by voting them-
selves a 33-percent raise.
Despite its concessions, Belgrade is still hunder
attack. This week at a Zagreb party meeting,
Croatian Premier complained of unemployment, lagging
production, and falling revenues. He said that sta-
bilization could not be achieved in Croatia. More-
over, in a highly unusual expression of Croat na-
tionalism, the Premier said that "the only thing being
well fed with dinars is the federal budget, from taxes
on trade." Similar complaints were used as slogans
during the nationalist excesses which led to the
Croat purge of 1971. Official revival of the theme
may mean that the Zagreb leadership is under consid-
erable grass-roots pressure and is dramatizing its
recent warnings of "negative political consequences."
Stane Dolanc, Tito's heir-apparent in the party,
showed concern in early May when he ordered the
government to protect the workers' standard of living.
Tito, who has not spoken out on domestic problems
since late April, will be watching closely for re-
assurance that Dolanc is capable of ha diffi-
cult matters without his intervention.
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SUDAN: The Numayri government has confirmed
press reports that the prosecution of the eight
Black September terrorists will begin next week
with a judicial investigation as prescribed by
Sudanese procedure. Such pre-trial proceedings are
often prolonged, but may be expedited in this case.
The terrorists apparently will be tried before a
civil rather than a military court on the charge
of murder, which carries the death sentence, or life
imprisonment if the court finds extenuating circum-
stances. The government has found one reason after
another to delay the trial, but may now believe that
the proceedings will receive less international pub-
licity while attention is focused on the UN Middle
East debate. President Numayri may also wish to
deflect public attention from recent price increases
on basic commodities.
WEST GERMANY: Government economic experts are
now predicting that the trade surplus this year will
set a record of $10-11 billion. Real gross national
product is expected to grow 6 percent, compared with
the 4.5 percent that had been forecast earlier. The
increase in the cost of living may reach or even ex-
ceed an annual rate of 9 percent this year, despite
the enactment of stringent controls on credit and
the anti-inflationary fiscal program just approved
by a parliamentary mediation committee. Rather
than moderate their wage claims, as the government
had requested, the unions are demanding and receiving
wage increases of 12-15 percent, which further add
to inflationary pressures.
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JAPAN-CUBA: Japan's Ministry of International
Trade and Industry (MITI) has floated a trial balloon
indicating its readiness to lift a 12-year ban on
Japanese Export-Import Bank credits to Cuba. An MITI
official recently told a US Embassy official of the
proposed move and it was subsequently aired in the
Tokyo press. In recent years, Cuba has pressed Japan
for official loans to finance purchases of such prod-
ucts as machinery, ships, and motor vehicles. In the
past, Tokyo has refrained from extending credits out
of deference to US wishes. MITI justifies the move
by noting it is consistent with warming East-West
relations, as well as on economic grounds. Moreover,
Japan points out that European countries are already
doing essentially the same thing, despite their ac-
ceptance of OAS resolutions restricting economic deal-
ings with Cuba. If the credits are granted, Japanese
sales are likely to grow considerably beyond the $51
million recorded in 1972, reducing the growing trade
deficit with Cuba. Last year's deficit of $95 mil-
lion was due primarily to large sugar purchases.
USSR: The Soviets have planted a record area
to spring grains, overcoming last fall's shortfall
in the sowing of winter grains. The total spring
grain area may amount to more than 104 million hec-
tares, 5 million more than last year and 6 million
more than the average in 1966-71. An early spring
and above-average rainfall are harbingers of a good
crop. Nevertheless, growing conditions from mid-June
to mid-July will be decisive in determining the final
outcome of the spring grain. harvest.
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CUBA - LATIN AMERICA: The Trend Toward Re-
integration
The Venezuelan campaign to force the Cuban
issue in the OAS to a vote will give new impetus
to Latin American efforts to end Cuba's isolation.
Six hemispheric countries have either established
or restored ties with Havana during the past year
and others seem likely to act soon. The increasing
willingness of Latin American governments to resume
regular ties with Cuba has resulted from the com-
bined influence of several factors:
--A broad transformation, since the mid-1960s,
in Latin American attitudes toward the US and the
rest of the world.
--An effort by the Cuban Government, since
1968, to normalize relations with other Latin
nations.
--The perception by some Latin leaders of
direct benefits in closer ties with Havana.
--The conviction of some governments that the
US may embarrass them by suddenly reversing its
Cuba policy.
The changing world view of Latin American
leaders has resulted in part from a perception of
a diminished external threat to hemispheric security.
Most Latin leaders--confronted by a rising tide of
nationalism--now see the problem of economic and
social development as their principal concern. Be-
cause of their preoccupation with development, many
Latins seem increasingly inclined to regard US eco-
nomic interests as frequently incompatible with
their-own. Consequently, many governments are ex-
panding their economic and political ties with
Japan, Europe, and the Communist nations as a par-
tial counterweight to US influence. Similarly,
there is a growing Latin consensus that unified
positions are needed in dealings with the US.
13 Jun 73 Central Intelligence Bulletin
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The Castro regime has not merely been a passive
beneficiary of this trend, but has sought at every
turn to strengthen it. In mid-1968, Havana began
to reduce its tangible support to Latin American
revolutionary groups and initiated an effort to nor-
malize relations with selected governments in the
hemisphere. This shift in tactics resulted from
the repeated setbacks of Cuba's subversive policy,
mounting economic difficulties, and increased Soviet
pressure. Cuban efforts to gain a respectable image
included earthquake relief to Peru, Chile, and
Nicaragua. In addition, Castro and other Cuban
leaders toned down their revolutionary rhetoric.
Havana's achievements, however, were generally
limited to low-level contacts---athletic, cultural,
and technical exchanges--until the Allende govern-
ment re-established diplomatic relations with Cuba
in November 1970.
In large part, this success in Cuba's efforts
to reduce its isolation stems from the advantages
Latin American governments see in normalized rela-
tions. Improving relations with Havana is a sure
way of establishing an image of "independence" from
the US without the risk of confrontation inherent
in expropriation of US properties. Faced with the
domestic pressures of fervent nationalistic emotions,
many governments see such an image as a virtual
necessity.
Some governments, such as Peru, Argentina, and
Venezuela, apparently feel that receiving Castro's
revolutionary endorsement can weaken the position
of leftist opposition groups. Furthermore, formal
relations are viewed as an effective way to terminate
or at least curtail Cuban support to local guerrilla
organizations.
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Others have sought improved ties with Havana
to gain Cuban support for cherished foreign policy
positions, particularly those involving actual or
anticipated US opposition. Cuba has been an out-
spoken advocate of the Panamanian position in the
canal negotiations. It has also supported the ex-
propriation measures of Peru and Chile. In addi-
tion, Havana has sided with the Latin Americans on
a number of general issues, including demands for
sovereignty over natural resources and removal of
restrictive US trade barriers and "coercive" eco-
nomic measures.
Cuba also gives lip service to Latin demands
for revision of the Law of the Sea, but in care-
fully worded generalizations that minimize conflict
with. the position of its chief ally, the USSR.
Castro has also voiced substantial support for the
right of the English-speaking Caribbean states to
participate fully in inter-American affairs. In
these and other problems, he is diligently encour-
aging the concept of Latin unity in dealing with
the US.
A few Latin American leaders, particularly
Torrijos of Panama, probably view rapprochement
with Cuba as a leverage mechanism in bilateral
dealings with the US. In Panama's case, low-level
contacts are being gradually increased while the
threat of formal relations is held as a trump card.
Other leaders, such as Manley of Jamaica and
Pindling in the Bahamas,may use their relationship
with Cuba in an attempt to gain additional US aid.
Some governments also view Cuba as a potential
customer. Cuba imported goods worth approximately
$10 million from Mexico in 1972, and recently signed
a $29-million contract. with Peru for 110 fishing
boats. Trade with Chile is continuing, Argentina
proposes to sell corn to Cuba, and Venezuela has
announced that talks on the sale of petroleum to
Cuba have begun.
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Finally, Latin Americans are becoming convinced
that efforts to isolate the Castro government have
succeeded only in tightening the Soviet grip on Cuba.
Many governments believe that the OAS sanctions policy
cannot last much longer and wish to avoid the appear-
ance of being last on the anti-sanctions bandwagon.
In addition, considerable suspicion still remains
that the US may embarrass those governments adhering
to the present sanctions policy by suddenly reversing
its own Cuba policy without consulting them.
Cuba's reintegration into the hemisphere will
probably continue at its present steady pace. Vene-
zuela and perhaps one or two other nations seem
likely in the near future to follow Argentina's
example in restoring formal relations. Others are
likely to fall into line. :in any case, support for
the OAS sanctions will inevitably decline. The
two-thirds majority (16 votes) required to lift the
sanctions probably cannot be mustered this year,
but the anti-sanctions forces need only one or two
more votes to achieve the "moral victory" of an
absolute majority (12 votes) against them.
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