CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025100020001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: November 28, 2003
• Sequence Number: 1
• Publication Date: August 17, 1973
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
USAID, DOS reviews completed
Top Secret
C c >;.
17 August 1973
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1 August 1973
Central Intelligence Bulletin
CONTENTS
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SAUDI ARABIA: Government debate continues over
level of oil production. (Page 2)
EASTERN EUROPE - USSR: Crimea summit underscores
differences between Moscow and Bucharest. (Page 3)
INTERNATIONAL MONETARY DEVELOPMENTS: Dollar moves
upward. (Page 5
PAKISTAN: Emergency flood relief requested. (Page 6)
PAKISTAN: Opposition leaders arrested. (Page 7)
AFGHANISTAN: New government falters. (Page 8)
FOR THE RECORD: (Page 9)
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SAUDI ARABIA: The debate in the Saudi Govern-
ment over the level of oil production is apparently
still going on. King Faysal, who has been signaling
in recent months that he considers Western access to
Saudi oil to be linked to US policy on Arab-Israeli
.matters, will ultimately determine the production
schedule. F -1
A wide range of opinion on production levels
is represented in senior government ranks. Some,
ravor a relatively
unrestricted increase in production until 1980;
others favor limiting production increases to be-
tween 5 and 10 percent per year. A freeze or even
a cutback in production is being recommended by
still others involved in oil and economic develop-
ment matters. This group argues that there has
been no political advantage to Saudi Arabia in
meeting Western oil needs and that increased pro-
duction makes little sense in economic terms. They
contend that the govern-
ment cannot effectively utilize e revenue it re-
ceives from current oil production levels. A Saudi
decision on future production levels is probably
still some weeks away.
17 Aug 73
Central Intelligence Bulletin
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EASTERN EUROPE - USSR: Soviet efforts at the
recent Crimea summit to impose a greater degree of
political and economic cooperation among the bloc
countries have underscored differences between
Moscow and Bucharest.
Romania favors a formulation that would
r use of force to change existing fron-
tiers, but would leave open the possibility of
future border adjustments by mutual consent. This
formulation is designed to protect Bucharest's in-
terest in avoiding permanent foreclosure of its
claims to northern Bukovina and Bessarabia, which
are now part of the USSR.
rest's sensitivity to Soviet plans for er co-
ordination of the member states' economies is al-
ways near the surface and dates back to Khrushchev's
plan for "supranational economic integration" in
the early 1960s. Under this scheme, Romania's
industrial development would have been virtually
stopped, and Romania would have been forced to
specialize in agriculture. Bucharest balked at
the plan, recognizing that without a degree of
17 Aug 73
Central Intelligence Bulletin
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freedom to develop "mutually advantageous economic
relations" with all countries it would lack the
base from which to move toward a more independent
path in foreign affairs. Bucharest's rejection
of "supranational integration" prompted the so-
called Romanian "declaration of independence" of
April 1964. The Romanians have since resisted
Soviet pressure to achieve "economic integration."
Renewed Soviet efforts to achieve increased
integration may already be under way. Polish Pre-
mier Jaroszewicz and Warsaw's leading CEMA specialist,
Deputy Premier Jagielski, went to Moscow on 15 August
to discuss "basic trends" for "coordination and de-
velopment of the national economies of the USSR and
Poland" with Premier Kosygin. Jaroszewicz' visit,
following Hungarian Premier Fock's trip to Warsaw
on 9-11 August, suggests that the cooperation pro-
posals may also concern Hungary.
17 Aug 73 Central Intelligence Bulletin 4
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Changes in the Dollar Value of Foreign Currencies Since 19 March
(in percent)
16 August 9 August 27 July 11 July 6 July
Mark
+13.9 +19.0 +23.1 +17.6 +25
1
French franc
.
+ 4.8 + 9.5 +12.5 +11.6 +19
9
Sterling
.
0.0 + 0.8 + 1.9 + 3.6 + 3
9
Yen
.
- 0.1 - 0.1 - 0.2 + 0.2 + 1.1
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INTERNATIONAL MONETARY DEVELOPMENTS: The
dollar strengthened markedly yesterday following
announcement of the first quarterly US balance-of-
payments surplus since 1969. According to German
foreign exchange dealers, sentiment toward the
dollar in foreign exchange markets was gradually
changing even before the new data were revealed.
The dealers report that customers who have been
short on the dollar for a long time are now anxious
to cover their positions before the dollar rises
further.
Despite the dollar's current strength, skep-
ticism persists about its prospects relative to
the mark and other European currencies. In Germany,
dealers feel that over the medium term the dollar
is now somewhat overvalued relative to the mark.
West Germany's domestic monetary situation will
probably tighten further in late September when
heavy tax payments are due. Moreover, if forth-
coming German wage settlements turn out to be
overly inflationary, the Bundesbank may raise in-
terest rates, thereby even further strengthening
the mark.
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PAKISTAN: Islamabad has requested emergency
relief assistance following extensive flooding,
described as the worst in more than 20 years. The
Jhelum, Chenab, and Ravi rivers in the north re-
portedly have reached high flood stage and the
Indus and Sutlej rivers are in medium flood stage.
The government estimates that some 20 million
people in Punjab Province have been affected and
that 2.8 million acres and 2,830 villages have
been flooded. Crops on 600,000 acres have been
severely damaged and an estimated 1 million tons
of food (primarily wheat and sugar) stored in the
area may have been damaged. The death toll thus
far is about 100 persons. Further flooding is
expected in Sind Province as high waters move
south.
While estimates of total crop damage are not
yet available, about 6 percent of the area tra-
ditionally planted to summer crops--primarily cotton,
rice, and sugarcane--appears to have been severely
hit. Islamabad has not estimated how much of the
affected food stocks are salvageable. The Bhutto
government has requested foreign countries to pro-
vide food and medical supplies, helicopters and
small boats for rescue operations, construction
materials, seed, fertilizer, and financial assist,
ance.
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PAKISTAN: The arrest of the three most im-
portant opposition leaders in Baluchistan Province
could lead to another confrontation between Prime
Minister Bhutto and opposition parties.
Since February, when he dismissed the opposi-
tion-controlled provincial government, Bhutto has
been unsuccessfully maneuvering for a political ac-
commodation that would give his supporters a majority
in the provincial assembly. The reported arrest of
the former governor, the former chief minister, and
the provincial. president of the National Awami Party
(NAP)--the province's largest--appears to signal an
end to this effort.
In the past, Bhutto has alternated between
pressure tactics and attempts at compromise. Sev-
eral previous confrontations have been resolved at
the last minute.
It is not yet clear who ordered the arrests.
Bhutto may have done so to forestall the installa-
tion of an opposition government, likely under the
new constitution that came into effect this week.
The governor could, however, have acted on his own,
partly to settle old scores.
Two of those arrested are also chiefs of major
tribes, and a significant increase in the hitherto
sporadic violence in the province--which borders
Afghanistan and Iran--is a distinct possibility.
The national leadership of the NAP, and probably
other opposition groups as well, may feel a strong
response to Bhutto is necessary. In Afghanistan,
the new government--already predisposed to interfere
in Pakistan's frontier provinces--might also feel
impelled to take some action.
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AFGHANISTAN: A month after the military coup
that brought President Daud to power, his government
has accomplished little and decision-making, except
for routine matters, is nearly paralyzed. The US
Embassy foresees at least several months of stagna-
tion and more.than normal inefficiency and believes
that there is enough instability in the situation
to make the eventual outcome for Daud and Afghanistan
uncertain..
The new rulers have been spending most of their
time trying to consolidate their power, and backstage
maneuvering among them is intense. Daud appears to
be strengthening his position, but the outcome of
his disagreements with the junior officers who spear-
headed the coup is unpredictable.
Senior and middle level officials are lying
low and refusing to make any decisions that might
be regarded as controversial. US AID advisers re-
port that officials with whom they deal are some-
times completely uninformed as to what course the
government will pursue.
No economic or development policies have been
announced. Either the government has not yet focused
on this basic problem or is unable to agree on what
should be done. The US Embassy doubts that some
members of the cabinet are capable of im lementing
policies even if they had been decided.
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 FOR THE RECORD*
Libya: Three members of the Oasis Group--Mara-
thon, Continental, and Amerada-Hess--have agreed to
Tripoli's demand for 51-percent nationalization.
The terms are similar to those agreed to by Occiden-
tal last Saturday; compensation for company assets
is to be based on net book value and the companies
will buy back the government's share of the nation-
alized oil at $4.90 per barrel. Shell, the fourth
partnef-in Oasis, has not agreed to the Libyan de-
mand.
Japan-China: A five-member Chinese delegation
begins talks today in Tokyo on a trade agreement.
Japanese press sources predict an agreement may be
concluded by the end of August. It would be the
first accord reached since diplomatic relations were
established nearly a year ago.
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*These items were prepared by CIA without consultation
with the Departments of State and Defense.
17 Aug 73
Central Intelligence Bulletin 9
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