CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024800030002-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 15, 2016
• Document Release Date: November 12, 2003
• Sequence Number: 2
• Publication Date: July 3, 1973
• Content Type: REPORT

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Central Intelligence Bulletin
On file Department of Commerce release instructions apply.
State Department review completed
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3 July 1973
Centra Intelligence Bullet
CONTENTS
CHILE: Allende rc ortedl will ev m
y a p his cabinet
to secure state ofiege. (Pa9 1)
P.AKISTAN-BANGLADYSH: Intex'm solution found for
debts. (Page 5
?R THE RECORD: (Page 9)
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CHILE: President Allende reportedly will re-
vamp his cabinet in an apparent effort to secure a
congressional declaration of a state of siege.
Allende still holds the initiative in the wake of
last Friday's abortive revolt, but he probably re-
mains wary of the possibility of another move
against him.
The disheartening effect of that day's events
on the opposition may have helped Allende settle
the 74-day-old El Teniente copper strike. The gov-
erning Popular Unity coalition continues to claim
that the country is in its most serious situation
since the civil war of 1891, however, and Allende
has asked the opposition-controlled Congress to
help him "crush fascism" by declaring a state of
siege.
The lower house yesterday rejected this request.
The National and Christian Democratic parties maintain
that the state of emergency and curfew now in effect
give the executive branch sufficient power to deal
with the alleged threat to constitutional order and
that a further curtailment of civil liberties is
unwarranted. The Christian Democrats may, however,
be willing to trade their decisive votes for mili-
tary entry into the cabinet.
At least five members of the extreme rightist
Fatherland and Freedom group, including its leader,
have sought asylum in the Ecuadorean Embassy. More
moderate opposition groups are unlikely to mourn
the loss of these lightning rods for government re-
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PAKISTAN-BANGLADESH: Islamabad has reluctantly
decided to accept a US-sponsored proposal that pro-
vides an interim solution for dividing the debt be-
tween Pakistan and Bangladesh.
At issue is some $1.2 billion in debts owed to 25X1
members of the Aid-Pakistan Consortium which were
incurred on behalf of the country's former East
wing, now Bangladesh. The consortium had earlier
maintained that these debts are the responsibility
of Islamabad until Bangladesh assumes the liability
and in March had offered to continue short-term
debt relief until an acceptable division of the
debt could be worked out. Pakistan demurred, and
threatened to cease servicing these debts after 30
June 1973, claiming that they posed an undue burden
on its economy and that the debt responsibility had
shifted to Dacca as the successor state. The con-
sortium held both Pakistan and Bangladesh respon-
sible for the impasse and made new pledges of "non-
humanitarian" economic aid conditional on the con-
tinued servicing of the total debt.
The latest US proposal was designed to prevent
Pakistan from defaulting on the debt and the result-
ing necessity to cut economic aid to either Pakistan
or Bangladesh. It calls for Pakistan to continue
servicing the debt of both wings until June 1974,
when it will be relieved of servicing the project-
aid portion disbursed before December 1971 in Bangla-
desh. Until June 1974, the aid donors will continue
to provide Pakistan with substantial debt relief.
The proposal also offers Pakistan the prospect of
long-term debt rescheduling once a division of all
debt liabilities is agreed to.
Pakistani acceptance of the consortium proposals
defers for another year the need to decide on a final
division of debts. Islamabad has expressed dissatis-
faction with its continuing liability for servicing
commodity loans incurred in Bangladesh. A resolution
of the bilateral economic issues between Pakistan
and Bangladesh will depend on the prior resolution
of existing political and humanitarian issues which
are not presently near solution. Thus, another debt
default crisis could occur next year. 25X1
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International Monetary Developments: The dol-
lar again hit new lows in European currency markets.
Austria is the only country so far to follow Germany
in revaluing its currency. The value of the schil-
ling was raised by 4.8 percent; close trade ties with
Germany and a high domestic rate of inflation were
the principal reasons for the move. The other major
capitals have indicated their intention not to fol-
low suit.
International Grain Trade: A Dutch agricultural
official told the US Embassy that inasmuch as the
Netherlands is highly dependent on imports of US soy-
beans and meal it would be highly displeased if Wash-
ington gave preferential treatment to Japan when al-
locating stocks available for export. Japan has
been seeking special consideration.
East Germany - US: The Union Bank of California
has agreed to extend East Germany a $17-million line
of credit. It was requested by the East Germans to
facilitate the expansion of bilateral trade, which
has been relatively low--approximately $25 million
in 1972--according to the Department of Commerce.
East German officials have expressed a desire to in-
crease substantially imports of US computers and
grain.
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Albania-CSCE: Albania has formally rejected
Helsinki's invitation to participate in CSCE, charg-
ing that the conference will merely confirm US and
Soviet hegemonistic ambitions at the expense of Euro-
pean nations. Tirana pointedly ignored invitations
to the CSCE preparatory talks, answering them only
through vituperative blasts at Moscow and Washington.
*These items were prepared by CIA without consulta-
tion with the Departments of State and Defense.
3 Jul 73 Central Intelligence Bulletin
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