CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025200010001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 15, 2016
• Document Release Date: November 12, 2003
• Sequence Number: 1
• Publication Date: September 1, 1973
• Content Type: REPORT

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Too Secret
Central Intelligence Bulletin
State Department review completed
Top Secret
C
1 September 1973
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1 September-1973
Central Intelligence Bulletin
LAOS: Continued deadlock over accord. (Page 1)
CHILE: Temporary respite in the political crisis.
Page 2)
CHINA: Chou En-lai's political report to party con-
gress. (Page 3)
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JAPAN - SOUTH VIETNAM: Aid to Saigon delayed.
(Page 6)
JAPAN - SOUTH KOREA: Kim kidnaping creating domestic
political difficulties for Tanaka government.
(Page 7)
PERU-US: President Velasco pressures US-owned company.
Page 8)
USSR - WEST GERMANY: Soviets to provide uranium en-
richment services. (Page 10)
PORTUGUESE GUINEA: Rebels may soon proclaim independ-
ent state. (Page 11)
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FOR THE RECORD: (Page 13)
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LAOS: The deadlock between Prime Minister
Souvanna and his right wing continues to delay a
settlement.
five rightist ministers threatened to resign if
Souvanna signed the draft protocol implementing
the Lao agreement of 20 February. The rightists
presented a substitute draft, based on Lao Army
objections, to the existing protocol. Souvanna
agreed to present their document to the Communists,
but emphasized that he was reserving the option of
signing the agreement already worked out between
the two sides.
Further significant concessions from the Com-
munists are unlikely. Their senior negotiator,
Phoumi Vongvichit, is planning to return to Sam
Neua if a settlement is not reached next week.
Souvanna, therefore, may now be forced to make a
choice between decisive action to break the im-
passe or a suspension or breakdown of negotiations.
Souvanna, who returned from the royal capital of
Luang Prabang on 29 August, appears to believe he
has the support of the King for any course of ac-
tion he adopts.
1 Sep 73
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CHILE: Caution and maneuver by the principal
actors have again eased the situation.
The government and
the Christian Democrats are negotiating again, and
some of the strikes have ended.
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Meanwhile, key cabinet ministers are showin
unaccustomed reasonableness.
t e ris.ian Democrats ve
reopen a dialogue with the government. While many
provincial shopkeepers remain on strike, Communist
Economy Minister Cademartori has convinced their
Santiago colleagues to open and has promised to
consider their demands. Transport Minister General
Magliochetti has resumed talks with striking teach-
ers, and Socialist Defense Minister Letelier has
assured a congressional committee that his legal
responsibility outweighs his commitment to his
party's policy.
This breather comes in time for Allende to
celebrate the third anniversary of his election
on 4 September.
1 Sep 73 Central Intelligence Bulletin 2
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C CHINA: Chou En-lai's political report to the
Tenth Party Congress reaffirmed Peking's post -
Cultural Revolution foreign policy. With regard to
domestic affairs, the report focused on the Lin Piao
affair and glossed over other contentious issues.
The USSR clearly emerged as the main threat to
China. In Peking's first official statement in the
current heightened polemical exchange between the
USSR and China, Chou in the harshest terms to date
described the Soviet regime as fascist rather than
Communist and in effect read Moscow out of the Com-
munist movement. Although Chou reiterated the now
standard Chinese argument, that the US and USSR are
contending for "hegemony," the Soviets were depicted
as expanding their presence in the Mediterranean and
the Indian Ocean, while circumstances have compelled
US imperialism to "decline."
Chou obviously tried, to head off any criticism
of Peking's efforts to improve relations with the
US by reminding his audience that they should dis-
tinguish between "necessary compromises" between
revolutionary and imperialist countries and "collu-
sion and compromise" between the US and the USSR.
He pointed to plans for the European Security Con-
ference as evidence that the key point of US-Soviet
contention was now Europe. Chou cautioned that the
US-Soviet detente is temporary and that in the long
run the interests of the two powers are incompatible.
The Premier reaffirmed Peking's intention to
play a leadership role in international affairs by
characterizing the awakening and growth of the Third
World as a major event in contemporary international
relations. He suggested that China should exploit
this situation to form the broadest front possible
against the "hegemonism" of the two superpowers.
On the domestic side, Chou announced that the
long-overdue National People's Congress (NPC) will
be held "soon." The NPC will probably ratify the 3
1 Sep 7 3 Central Intelligence Bulletin
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Cdecisions made at the party congress, resolve the
question of whether there should be a new head of
state, and fill top vacancies in the government min-
istries.
Chou's report contained only bland statements
on a number of vexing domestic policy issues, sup-
porting a general impression that the abbreviated
congress did not engage in a full discussion of
these issues. Among other things, Chou:
--said the economy is "doing well;"
--noted that there have been "many new achieve-
ments" in culture, health, technology, science,
and education, but failed to elaborate on the
policy debate over these issues that waged in
the media even as the congress met;
--suggested a continuing role for the revolu-
tionary committees, administrative organs that
replaced government bodies during the Cultural
Revolution, but were reportedly being phased
out prior to the congress;
--asked that party members be willing to accept
"higher or lower posts," an apparent reference
to several prominent officials rehabilitated
earlier this year who have not regained their
former positions.
Much of Chou's report dealt with the Lin Piao
affair, underlining the correctness of party policy
since the ninth congress and linking Lin Piao's re-
visionism to the Soviet Union. Chou reiterated the
official version of the story that Lin Piao had at-
tempted to assassinate Mac) in September 1971 and
had died in a plane crash in Mongolia in an attempt
to flee to Russia after his plot was uncovered. Al-
though Chou called for the continuation of the cam-
paign against Lin and his followers, he offered a
note of reassurance that the Lin conspirators were
a "tiny" group that was "extremely isolated" from
the rest of the party and army.
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JAPAN - SOUTH VIETNAM: There has been some
slippage in the timing of-the disbursement of Tokyo's
promised $50-million aid package for Saigon. The
Foreign Ministry had told the US that the funds--
$30 million in commodity aid loans and a grant of
$20 million for humanitarian assistance--would be
disbursed following the recess on 28 September of
the Japanese Diet. Tokyo originally planned to act
without going to the Diet for approval, because un-
der Japanese law assistance grants can be authorized
from government contingency funds when the Diet is
not in session. Now, however, because the aid was
publicly announced while the Diet was still in ses-
sion, Prime Minister Tanaka feels obligated to re-
quest supplementary budget funds to cover the $20-
million grant when a special Diet session is con-
vened in late November. Although the $30 million
in loans could be authorized immediately, Tanaka,
for tactical political reasons, believes he should
get Diet approval for the "more urgent" grant aid,
primarily refugee assistance, before the loans are
disbursed.
The delay is a major disappointment to the
Saigon government. The increased supply of commodi-
ties from the aid would have helped slow Saigon's
spiraling prices, now up some 40 percent since last
December. The portion of the grant assistance that
would have come in the form of food supplies would
also have helped ease a rice shortage projected for
this fall.
Saigon, moreover, is having balance-of-payments
difficulties. Reserves of gold and foreign exchange
are presently about $130 million, down by $100 mil-
lion since the beginning of this year. Import-
financing problems are likely to be particularly
serious in the last quarter. A French aid agreement
for $10 million in balance-of-payments support is
not likely to be signed until late September, and
the funds will probabl not be disbursed before the
end of the year.
1 Sep 73 Central Intelligence Bulletin 6
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JAPAN - SOUTH KOREA: The kidnaping of South
Korean opposition leader Kim Tae-chung three weeks
ago is creating domestic political difficulties for
the Tanaka government.
Prime Minister Tanaka is caught between popular
demands that he take actions to demonstrate Japanese
displeasure and the need to protect long-term Japa-
nese political and economic interests in South Korea.
The opposition political parties are skillfully ex-
ploiting popular nationalistic resentment over the
incident and have stalled the government legislative
program ever since they returned to the Diet on 23
August after a month-long boycott.
Tokyo is considering calling its ambassador in
Seoul home for consultation and has postponed an
important ministerial conference with Seoul
that
was to have been the occasion for announcing
several
hundred million dollars in development
loans
for
South Korea. This action will have no
great
immedi-
ate affect, however, because the loans
would
cover
a period of years.
Because of Japan's important security, politi-
cal, and economic interests in South Korea, Tokyo
is reluctant to take any step that would further
damage the hard won, cordial relationship that has
existed between the two countries. The Liberal
Democratic leadership may also be concerned by the
reaction of its financial backers with interests
in Korea and of the party's right wing to any such
steps.
The Japanese Government appears determined to
maintain the status quo in. bilateral relations, but
it may be forced to make some gesture to placate
public opinion if solid evidence of South Korean
Government com licity in the Kim case should be
developed.
1 Sep 73 Central Intelligence Bulletin 7
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PERU-US: President Velasco's threat to seize
the US-owned Cerro de Pasco mining company if buy-
out negotiations fail is another pressure tactic de-
signed to intimidate the company into lowering its
asking price. Cerro had been trying for over a
year to sell out before Velasco declared in his In-
dependence Day speech last July that Peruvian take-
over of the company had become a high priority ob-
jective in the process of "deepening the revolution."
Velasco now expects Cerro to be on the agenda when
official talks on US investment in Peru resume later
this month.
The key question is how the inevitable nation-
alization will be accomplished, that is, the valua-
tion given the company's assets and the amount and
method of compensation. Cerro's prospects for an
equitable settlement depend in large part on the
dynamics of the on-going struggle between moderate
and radical factions of the armed forces hierarchy
over general policy direction and an eventual suc-
cessor to Velasco.
The radicals, led by Energy and Mines Minister
Fernandez Maldonado, have. been working to minimize
the government's valuation of the company and focus
attention on debts Cerro allegedly owes Peru. The
moderates want to avert a dispute over compensation
that might disrupt efforts to attract foreign in-
vestment.
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Foreign extraction of the nation's
mineral wealth is an emotion-charged issue, and
the moderates will be wary of associating themselves
too closely with the interests of a US company.
With the cabinet almost evenly split along radical-
moderate lines and defense of national sovereignty
likely to be just as much at issue as the economic
consequences of nationalization, prospects for an
outcome satisfactory to Cerro are not particularly
promising.
(continued)
1 Sep 73
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The coming talks are sure to affect the deci-
sion, and time may be of the essence. Early next
month Peru celebrates two major anniversaries--the
military's accession to power on 3 October 1968
and its seizure of the International Petroleum Com-
pany six days later--at which time Velasco may want
1 Sep 73
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USSR - WEST GERMANY: The Soviets appear to be
close to signature of a contract to supply uranium
enrichment services to a West German utility company.
A major breakthrough in the lengthy negotiations
reportedly occurred recently when the Soviets agreed
to a more prominent role for EURATOM in the deal.
US officials in Brussels have been advised informally
that Moscow will permit EURATOM to concur in the con-
tract and will accept EURATOM safeguards on the nu-
clear material until the..:LAEA-EURATOM verification
agreement becomes effective. A few technical prob-
lems remain, but EURATOM officials expect the con-
tract to be. signed in about six weeks.
Under the contract, worth an estimated $10 mil-
lion, the Soviets would do the separative work to
enrich uranium during the 1970s at 5 percent less
than the US price... Moreover, they would guarantee
to hold the price below any US quotation through the
1980s. Moscow would gain not only substantial for-
eign exchange benefits, but also some limited polit-
ical mileage by exploiting the West's energy crisis
and West European dissatisfaction with a recent US
increase in its charges for enriching uranium. The
Soviets have a small contract with the French and
may have recently concluded one with the Italians.
The contract with the West: Germans, however, is the
most ambitious Soviet venture into this Western
market.
Further Soviet offers to supply enrichment serv-
ices may run up against the EC's effort to enhance
its own uranium enrichment: capabilities. The EC has
set up a committee to study this subject. Sweden
and Switzerland, both of which have negotiated with
the Soviets in recent months, have been invited to
participate in the EC deliberations.
1 Sep 73 Central Intelligence Bulletin
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Dakar
Algiers
I
Gl ft EA
Freetaw
SIERRA
LEONE
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PORTUGUESE GUINEA: The anti-Portuguese rebels
may soon proclaim the establishment of an independent
government, possibly at the nonaligned conference
that opens next week in Algiers.
Leaders of the African Party for the Independ-
ence of Portuguese Guinea and the Cape Verde Islands
(PAIGC) announced earlier this year that such a dec-
laration would come before the end of 1973. In May,
following military successes against the Portuguese,
.a high-level spokesman indicated the PAIGC would at-
tend the Algiers conference as the representative of
an independent state. PAIGC leader Aristides Pereira
further announced in mid-August that the necessary
preconditions for independence have been fulfilled.
.A declaration of independence would almost cer-
tainly receive the support: not only of African states,
but of Communist countries, most nonaligned govern-
ments, and some European governments as well. The
PAIGC hopes that widespread recognition will put
pressure on the US and other Western countries to
follow suit. The PAIGC expects that once a declara-
tion is made, other countries will be willing to brand
the Portuguese as aggressors, thereby opening the
door to increased aid.
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Nonaligned Conference: Representatives of about
70 nations from four continents will attend the con-
ference of self-styled nonaligned states that opens
Sunday in Algiers. Some 20 observers and guests,
representing various liberation movements as well as
governments, will also be present. The participants
hope to demonstrate to the great powers that the non-
aligned movement remains a significant force in in-
ternational affairs.
F
Finland-USSR: President Kekkonen plans to go
to Leningrad tomorrow for talks with Premier Kosygin
and to lay the cornerstone for a joint development
project near the border. The talks likely will fo-
cus on the coming second stage of CSCE and on the
vexing issue of Helsinki's proposed free-trade agree-
ment with the EC.
Sudan: Anti-government demonstrations planned
for yesterday in the capital failed to materialize.
Muslim Brotherhood student agitators at Khartoum
University are calling for a general strike today,
but there is no sign that they have rallied support
among workers and shopkeepers.
Ecuador: The military government has been un-
able to quell serious student disturbances in coastal
cities despite forceful countermeasures. The sta-
bility of the regime is likely to be threatened if
the situation worsens.
*These items were prepared by CIA without consulta-
tion with the Departments of State and Defense.
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NATIONAL INTELLIGENCE ANALYTICAL MEMORANDUM
The United States Intelligence Board on 24
August 1973 approved the following national intel-
ligence analytical memorandum:
NIAM 36.7-73 "Syria's Middle Eastern
1 Sep 73
Role."
Central Intelligence Bulletin
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Top Secret
Top Secret
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