CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024900060001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 19, 2016
• Document Release Date: May 5, 2005
• Sequence Number: 1
• Publication Date: July 21, 1973
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
State Department review completed
NAVY review(s) completed.
Top Secret
C Ad U 4:
21 July 1973
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21 July 1.973
Central Intelligence Bulletin
CONTENTS
LIBYA-EGYPT:
'march on Cairo. (Page
EGYPT - ARAB STATES: Cairo moving to improve ties
with broader range of Arab states. (Page 3)
CHILE: Allende finds his supporters nearly as
troublesome as his opposition. (Page 5)
SPAIN: New Foreign Minister wants early discussion
of terms for renewal of US treaty. (Page 6)
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ALGERIA: Surge of foreign borrowing to help finance
development. (Page 8)
JAPAN: Prices continue to rise despite curbs.
(Page 9)
FOR THE RECORD: (Page 10)
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LIBYA-EGYPT:
cision to make public is resignation--w is a sal
Sadat already knew about--is further indication that
he fully intends to place his prestige and leadership
behind his own concept of the union. Qadhafi may
reason that by relinquishing his leadership of Libya
as a separate state, he has in the most dramatic way
demonstrated his dedication to creating a larger Arab
republic. Far from weakening the drive toward full
union, his latest action is intended to make it more
irresistible.
Qadhafi's announcement is a complication for
Sadat, but it should not significantly magnify the
problems he already has in working out a formula for 3
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*Tripoli
Al BaydaDarnah
Bengazi g obruk
Mersa Matruh Alexandria
Fukah 'Al Alamayn
Cairo*
ISRAEL
(JORDAN
1 i
Sinai t
(ISRAELI-
OCCUPIED)
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tunion that meets Egyptian needs for a very gradual
and cautious approach. No matter how determined
Qadhafi may be, Sadat is unlikely to give in to the
Libyan's demands for full. and immediate union, and
the general Libyan performance--from the march to
Qadhafi's dramatics--could if anything intensify
Sadat's negativism on the entire union project. The.
Egyptians published what is probably their minimum
position on merger two days ago when the march began.
It involves a formula that has all the outward trap-
pings of full unity but allows a year's grace period
for preparations and consultations before the proj-
ect is completed and referred to a plebiscite in
September 1974. It is doubtful that Sadat would go
much further to satisfy Qadhafi.
Egypt is currently confronted with the more im-
mediate problem of holding back the procession of
determined Libyan seekers after union.
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21 Jul 73
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EGYPT ARAB 'STATES: Egypt is improving its
relations with Sudan in the latest of several Egyp-
tian moves to better its t:Les with a broad range of
Arab states.
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The new warmth in the Egyptian-Sudanese rela-
tionship accompanies a corresponding improvement in
Egyptian relations with other Arab states, partic-
ularly conservative states on the Arabian Peninsula.
Arab solidarity--however elusive--is always
a goal of Arab leaders, and this objective took on
added urgency earlier this year when Sadat put re-
newed emphasis on his preparations for military
action against Israel.
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Sadat has more immediate concerns as well.
Egypt desperately and perennially needs economic
assistance, and the oil-rich states have it in
abundance to give. In this connection, Egypt's ef-
forts to better its ties with its wealthy neighbors
have probably been accelerated in recent weeks by
the diminishing prospects for an effective merger
with Libya, whose own wealth was the primary induce-
ment for Cairo's participation in the union project.
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CHILE: President Allende is finding his sup-
porters nearly as troublesome and intractable as his
opposition.
Workers in some of Santiago's industrial dis-
tricts clashed with the carabineros on Thursday af-
ter barricading the streets near the factories they
have held since 29 June. The workers, apparently
led by the extreme leftist Movement of the Revolu-
tionary Left (MIR), demanded that the government an-
nounce the immediate nationalization of all the in-
dustries they have seized. The regime's position is
that each case will be studied individually and that
only "monopolistic" or "strategic" firms will be
taken over by the state.
The Communists and Socialists, who reportedly
have agreed to try to increase their influence over
government policy vis-a-vis Allende, appear to be
opposing the President's hope of returning some in-
dustries to their owners. The Communist-dominated
Chilean Trade Union Confederation, however, is con-
cerned that MIR-organized "people's power" groups
are undercutting its influence in the factories and
it appears to be looking for a middle ground.
The Communists, Socialists, and the MIR may
hold Allende personally responsible for the cara-
bineros' use of force against the workers. The in-
cident will not help the President in his effort to
convince the Popular Unity parties to support an
easing of tensions by talks with the opposition
Christian Democrats.
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SPAIN: The new Foreign Minister, Lopez Rodo,
has already begun to define Madrid's terms for re-
newal of the agreement of friendship and cooperation
with the US. The agreement permits the US to use
several military bases constructed on Spanish soil
under the terms of the original 1953 pact.
Although the agreement does not come up for re-
newal until 1975, the Spaniards want to start nego-
tiations early to avoid the last-minute rush to set-
tie terms that characterized previous renewals.
Lopez Rodo told Secretary Rogers in Helsinki and
the US ambassador in Madrid that he wants to discuss
the negotiations when he comes to the UN in October.
He stressed that, instead of another agreement,
Spain wants a formal treaty which would broaden the
areas of cooperation.
In more categorical terms than he used with the
Secretary, Lopez Rodo told the ambassador that the
US could stay in the naval base at Rota only if the
Gibraltar question were settled. There is no justi-
fication, he argued, for two bases in the area.
The Foreign Minister urged the US to use its good
offices to change the intransigent stand of the
British against returning Gibraltar to Spain.
Since 1963, Spain has conducted an often vigor-
ous campaign to wrest Gibraltar from the British.
Madrid succeeded in getting a UN resolution direct-
ing Spain and the UK to negotiate the matter, and
another resolution calling on the UK to terminate
its occupation of Gibraltar by 1969. Spain has
tried to negotiate, resorted to harassment of UK
communications with Gibraltar, and cut off direct
access from the Spanish mainland. London has ig-
nored the UN resolution to get out, and the numerous
meetings between the foreign ministers have failed
because of UK insistence that it cannot give up the
island without the consent of the inhabitants. The
latest series of talks broke off in May when, ac-
cording to Lopez Rodo, the British bluntly told the
Spaniards that they might as well get used to a
separate Gibraltar.
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ALGERIA: A recent $50-million loan from Japa-
nese banks is the latest installment in a surge of
foreign borrowing-by President Boumedienne. So far
this year, Algeria has borrowed $1.6 billion, five
times last year's total. The increased borrowing
is intended primarily to finance the 1974-77 plan,
which calls for investment of $11.5 billion. The
new loans, having a grace period, also will help
Algeria service its large foreign debt; annual re-
payments during the next several years amount to
roughly one fifth of the country's foreign exchange
earnings.
All of Algeria's loans this year have come from
non-Communist countries. A $557-million US loan in
March, the largest single credit, is for development
of Algerian natural gas, most of which will be sup-
plied to the US. Many of the loans are for the ac-
quisition of advanced technology and equipment--
in line with Boumedienne's desire to stimulate in-
dustrial development. Other large lenders are Japan,
Canada, West Germany, the UK, and some Arab coun-
tries. The increased credits in turn will stimulate
Algerian trade with non-Communist countries, in-
cluding the US.
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JAPAN: Prices continue to rise despite progres-
sive tig th ening of monetary controls and the post-
ponement of spending on some public works. The
wholesale price index for the first ten days of July
was nearly 15 percent higher than a year ago. Limit-
ing the availability and raising the cost of bank
credit have not yielded the desired spending slow-
down because businesses have been able to finance
an exceptionally large amount of investment from
their internal funds. The government is press
firms to scale down their investment plans.
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FOR THE RECORD*
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Cambodia: Sihanouk left Peking by train yester-
day for a three-week visit to North Korea. He was
accompanied by members of his family and by s pro-
Communist "minister of economy and finance."I
Thailand: The government has revalued the baht
upward by 3.8 percent, the first adjustment in the
dollar-baht exchange rate since 1963. Bangkok hopes
that the new rate will help ease pressure on the
domestic price level. The new rate, however, will
not satisfy many critics who, placing a large part
of the blame for rising domestic prices on the dol-
lar crisis, have urged a revaluation of at least
10 percent. F7 I
*These items were prepared by CIA without consulta-
tion with the Departments of State and Defense.
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