CENTRAL INTELLIGENCE BULLETIN

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79T00975A024800050001-1
Release Decision: 
RIPPUB
Original Classification: 
T
Document Page Count: 
12
Document Creation Date: 
December 15, 2016
Document Release Date: 
August 22, 2003
Sequence Number: 
1
Case Number: 
Publication Date: 
July 6, 1973
Content Type: 
REPORT
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PDF icon CIA-RDP79T00975A024800050001-1.pdf371.7 KB
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Approved For Cease 2003/09/26 : CIA-RDP79T0097248000 001-1 secret 25X1 Central Intelligence Bulletin Secret N2 042 6 July 1973 Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1 25X1 Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1 Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1 Approved For lease 2003/0 CRIIB=FDP79T0097 24800050001-1 No. 0161/73 6 July 1973 Central Intelligence Bulletin CHILE: Allende appoints new cabinet. (Page 1) INTERNATIONAL MONETARY DEVELOPMENTS: Assessment of pressures on the dollar. (Page 3) YUGOSLAVIA: Tito announces he will concentrate on foreign affairs, implying a decreasing role in do- mestic matters. (Page 5) PHILIPPINES: Severe rice and corn shortages. (Page 6) RWANDA: The army claims it seized power to avert civ^il war. (Page 7) WEST GERMANY: High investment rate will maintain pace of boom. (Page 8) Approved For Release 2003/CRB J '' 2DP79T00975A024800050001-1 Approved' For ease 2003/0I DP79T009754800050001-1 CCHILE: President Allende's new cabinet reflects the political composition of his Popular Unity coali- tion. Seven new ministers were appointed and eight were retained from the previous cabinet. In a speech prior to the swearing in, Allende was hardly conciliatory; he did not meet the concerns of the opposition or the armed forces. He called on his new ministers to redouble their efforts to carry out the Popular Unity program,'and in particular to implement a plan to reverse the political and economic deterioration of the country. Despite the President's apparent reasonableness and determination, the new plan emphasizes a further extension of state enter- prises as well as state distribution of foodstuffs and other essential consumer goods. Perhaps in an effort to mollify the military, who made certain demands on him recently, Allende did not reappoint any previously impeached ministers, as he had earlier pledged to do. 6 Jul 73 Central Intelligence Bulletin Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1 SECRET 25X1 Approved FoIease 2003/09/26 : CIA-RDP79T009024800050001-1 SECRET change Rate Changes Relative to the Dollar Since theuropean Joint Float was Introduced on 19 M ch (Figures in Percent) Mark Guilder French franc Sterling Swiss franc 7 May* 1 June - +5.6 28 Jung' 5 July +1.3 1-4,,6 \ +5.0 Yen -0.3 / +0.1 +0.2 \ 0.0 *at strongest levels in recent months Approved For Release 2003/09/26 CIA-RDP79T00975AO24800050001-1 SECRET Approved For lease 2003/( P4TRDP79T009TU624800050001-1 INTERNATIONAL MONETARY DEVELOPMENTS: The dollar cant Hues to weaken, primarily because international money managers believe that in the short term other currencies, particularly the German mark, are more likely to appreciate than the dollar. To the extent that the money managers act on this belief, it is a self-fulfilling prophecy. The existence of the narrow European currency band is an inviting target for corporate and finan- cial money managers and speculators. The relatively fixed intra-band rates provide the same opportunity for low-risk profit or avoidance of loss evident under the earlier world-wide system of fixed ex- change rates, as demonstrated by the recent revalua- tion of the mark. Because a high proportion of liquid international assets are in dollars, specula- tive movements generally result in dollar sales. The German mark is the currency favored by traders, primarily because of its remarkable per- formance in the last few years. Since December 1966, the mark appreciation has been extraordinary-- over 60 percent. West Germany's exceptional export earnings--likely to be enhanced in the short term by the most recent appreciation--and the government's aggressive anti-inflationary program suggest to money managers and speculators that the mark will probably soon again be a candidate for revaluation. Although the dollar may show temporary strength when traders take profits or repay dollars that they borrowed to exchange for other currencies, there is little chance for a sustained recovery in 1973. The near-term burdens on the dollar--infla- tion, the psychological impact of continuing domes- tic political uncertainty, the potential damage to the US balance of payments by agricultural export controls--clearly far outweigh in traders' minds the longer-term prospects for balance of payments improvement resulting from the already substantial dollar devaluation (continued) Central Intelligence Bulletin 3 Approved For Release 2003/0?*-i-kDP79T00975A024800050001-1 Approved For lease 2003/09/26 : CIA-RDP79T00975i124800050001-1 SECRET The next pressure point in the European joint float may be the Danish crown,which has firmly en- trenched itself at the bottom of the band amid rumors--officially denied--of impending devaluation. The weakness of the crown is largely due to a i ing trade deficit. Central Intelligence Bulletin 4 Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1 SECRET Approved For lease 2003jR)EBRBXRDP79TO09-/ 24800050001-1 YUGOSLAVIA: President Tito's announcement that he will Intensively concentrate" on foreign .policy is an attempt to reassure the Yugoslavs that he is still in charge despite recent limitations on his activities. In his first major speech in, more than two months, Tito on Wednesday warned his people "not to.be surprised" that he must devote his time to foreign policy, implying that he will be less ac- tive in domestic matters. He noted that three of the four founders of the international nonaligned movement--Nehru, Nasir, and Sukarno--are dead and said that he, as the sole survivor and "main ini- tiator" of nonalignment,has great responsibility for the movement's future. assume his protocol tasks. The 81-year-old President has frequently ex- pressed a desire to limit his role in domestic af- fairs, and in the fall of 1970 ordered the creation of a collective'state presidency to ease his bur- dens. He began.to withdraw from internal political discussions earlier this year and has only attended two party meetings since late April. Although he has hosted a series of foreign dignitaries in recent months--and is due to receive several more this month--Tito is slowing down. A new protocol in Yugoslavia has relieved him of ceremonial responsibilities during state visits. Tito's subordinates--Stane Dolanc, his heir apparent in the party and Vice President Rato Dugonjic--will 6 Jul 7 3 Central Intelligence Bulletin Approved For Release 2003/ RDP79T00975AO24800050001-1 Approved For l ease 2003/Q W . RRDP79T0097 24800050001-1 PHILIPPINES: A severe rice and corn shortage in `fwo central provinces may result in serious prob- lems for the Marcos administration. 11 Philippine officials believe the shortage stems in part from the un- willingness of wholesale and retail dealers to sell rice at the government-imposed price ceiling. Local warehouses are empty, and there is speculation that dealers have hidden their stocks in outlying areas. Meanwhile, the government is seeking to import at least 400,000 tons of rice to meet domestic re- quirements between now and November, when the next rice crop is harvested. Manila has not been able to procure rice from the US on PL-480 terms, and talks with Peking and Bangkok have not resulted in any contracts to date. Supplies are tight in China, and Thailand has not yet determined.how much rice it will have available for export from its summer harvest. Manila may be forced to import wheat as a substi ute. most likely from th e on commercial terms. Central Intelligence Bulletin 6 Approved For Release 2003/Q 2 fDP79TOO975AO24800050001-1 Approved Foilease 2003/RDP79T009024800050001-1 25X1 RWANDA: The National Guard seized control of the government on 4 July, claiming that it did so to head off a civil war. President Kayibanda ap- parently remains in office, although his future role is unclear. The cabinet and national assembly were dismissed and all political activity was sus- pended. A National Committee for Peace and Unity will take over administration of the government. The committee is headed by Minister of National Guard Habyarimana who.led the coup. There is no evidence to suggest that Rwanda was on the brink of civil war. The military move may have been prompted by the personal rivalries and factional disputes that have been intensifying since early 1973. Central to the factionalism within Rwanda's Hutu-dominated government is a north-south split over policy toward the country's Tutsi minority, with northerners urging strong re- pressive measures. Over the years, the Tutsis have assumed a commercial and intellectual impor- tance far greater than their share of the population. Although a northerner, Habyarimana is a long- time supporter of the President and a moderate on the Tutsi issue. However, the 3,000-member National Guard--Rwanda's army--is dominated by northerners, some of whom may take advantage of the coup to push for Tutsi repression. This group would like to re- taliate for the events of last summer when the Tutsi- dominated government in neighboring Burundi purged its Hutu majority, killing as many as 200,000. 1 1 Central Intelligence Bulletin Approved For Release 2003/09'&cC'FA-RDP79T00975A024800050001-1 Approved For ease 2003/09 CRj~gDP79T00975 4800050001-1 WEST GERMANY: Orders placed with investment goods industries in May rose 17 percent above the April level, a much larger increase than is usually registered during that month. This probably will maintain the rapid pace of economic activity and postpone the effects of the government's anti-infla- tionary program. The high level of new orders re- flects heavy buying prior to the imposition of an 11-percent investment tax on 9 May. It is unlikely that the new tax will dampen activity in this very expansionary sector in the short run. 6 Jul 73 Central Intelligence Bulletin Approved For Release 2003/OIMC-I CRDP79T00975A024800050001-1 Approved Foilease 2003/09/26 : CIA-RDP79T009724800050001-1 Secret Secret Approved For Release 2003/09/26 : CIA-RDP79T00975AO24800050001-1