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December 15, 2016
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March 30, 2004
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March 15, 1974
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Approved For Release 2004/07/08 : CIA-RDP79T00975A026200200001-8 Top Secret Central Intelligence Bulletin Top Secret c U-8 March 15, 1974 DIA and DOS review(s) completed. 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975A026200200001-8 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Appr ed For Release 2004/07/08 : CIA-RDP79T00975A0262 0200001-8 25X1 March , Central Intelligence Bulletin CONTENTS PORTUGAL: Armed forces Chief of Staff Gomes and his deputy, General Spinola,dismissed. (Page 1) IRAN: Tehran opts for lower peak production in order to stretch out oil reserves. (Page 2) 25X1 25X1 25X1_ SOUTH AMERICA: Chilean President seeks to counter alleged aggressive designs of Peru. (Page 16) UGANDA-CZECHOSLOVAKIA: Prague follows Moscow's lead and reinstates military deliveries to Uganda. (Page 18) JAPAN: Overseas borrowing by Japanese firms will ex- pand rapidly over next several months. (Page 19) FOR THE RECORD: (Page 21) 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Approv PORTUGAL: The Portuguese Government yesterday dismisse armed forces Chief of Staff Costa Gomes and General Spinola, his deputy. The action is a victory for right-wing forces who oppose Spinola's advocacy of greater autonomy for Portugal's overseas territories. 25X1 The dismissals are certain to send further shock waves through the Portuguese hierarchy, which includes many Spinola supporters. Probably in anticipation of this, the government announced that it would par- tially reimpose the state of alert that confined troops to barracks for four days this week. The discharges may also cause rumblings in the overseas territories. Most civilian and military leaders will be relieved that Spinola's ideas about self-determination have been rejected. Early indications are that Costa Gomes will be replaced by General Joaquim Luz Cunha, a rightist who has commanded Portuguese forces in Angola since 1972. No replacement or Spino a as been announce o far. Over the last week the government quietly posted Spinola sympathizers in the military as far away from Lisbon as possible. This dispersal of Spinola sup- porters is probably continuing. The US Consulate in the Azores yesterday reported a rumor that 48 more officers would soon arrive in the islands. Some junior officers, who presumably supported a change 25X1 25X1 25X1 25)1 25X1 earlier in the week. Mar 15, 1974 Central Intelligence Bulletin Approved For Release 2004/07/08 : CIA-RDP79T00975A026200200001-8 App IRAN: Iran apparently is planning to slow the rate of Increase of its petroleum production in order to stretch out its oil reserves. Tehran plans to build several refineries and petrochemical plants and probably wants to ensure that sufficient domestic oil will be available for the projects. The National Iranian Oil Company has instructed the consortium of Western oil companies to prepare a new production plan. Iranian Oil Company offi- cials have asked company representatives to calculate the new program conservatively, on the basis of known reserves only, and to plan peak production at a level that can be sustained for at least eight years. According to a plan published last June, the consortium had expected to raise production from the current rate of 5.7 million barrels per day to a peak of 7.6 million b/d by the end of 1976 and to sustain that level until 1985, when it would begin dropping. Recent company estimates of reserves have been more pessimistic, however, and Iranian production is now expected to begin declining more quickly. Although the new plan probably will not affect production this year, an oil company official believes the program could lead to a new consortium peak production goal as low as 6.5 million b/d. The timing of the Shah's decision presumably is related to the rapid price increases in recent months that will yield the government more revenues in the next three to five years than can be ab- sorbed effectively by the economy. The decision probably also reflects the Shah's belief that oil prices are not likely to decline substantially over the next five or ten years. Such a slowdown in the growth of Iranian pro- duction would further enhance the key role to be played by Saudi Arabia over the next several years. The Saudis are capable of increasing production to offset the Iranian shortfall, if King Faysal so desires. (continued) Mar 15, 1974 Central Intelligence Bulletin 25X1 25X1 The Shah is currently revamping his economic development plan, which runs from 1973 to 1978, and he is apparently concerned that rapidly expanding oil revenues could have a hyperinflationary impact on the economy. He may be trying to hold down the expansion of spending because of the strain on existing capacity and the consequent upward pressure on prices. Mar 15 , 1974 Central Intelligence Bulletin 3 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Next 11 Page(s) In Document Exempt Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Appro SOUTH AMERICA: Chilean junta President Pinochet will seek a stronger Brazilian commitment for assist- ance in countering the alleged aggressive designs of Peru when he meets with President Geisel tomorrow. Pinochet, in Brasilia for Geisel's inauguration, re- portedly will ask for Brazilian aid in acquiring weapons from third countries hesitant about selling to the junta, as well as for more materiel from Bra- zil itself. Peru's purchase of Soviet tanks and acceptance of Soviet training personnel have heightened Chilean concern over traditional Peruvian revanchism. Pinochet reportedly will try to convince Geisel that Cuba and the USSR plan to use Peru as the new "bridge for Marxism" in the hemisphere, with the ultimate goal of isolating Brazil. Geisel, who probably has a more objective per- spective on the issue of "Marxist penetration," is unlikely to buy all of Pinochet's thesis. Brazil does, however, want the Chilean junta to succeed and will continue to provide economic aid Bolivian President Banzer is also attending the Geisel inauguration, and Brazilian officials have helped arrange an informal meeting between the Chil- ean and Bolivian leaders. This is in line with Bra- zil's interest in helping the junta patch up Chile's quarrel with Bolivia. Such a rapprochement would be important to Chile in the event of a confrontation with Peru. Both Pinochet and Banzer have said publicly that they are willing to discuss issues of common concern. Bolivian claims to territory conquered by Chile in the War of the Pacific in the last century have been a source of friction ever since. Diplomatic ties have been suspended for over a decade because of a dispute over Chile's diversion of a river that flows through both countries. (continued) Mar 15, 1974 Central Intelligence Bulletin 25X1 25X1 25X1 Ap roved or a ease 001-8 The Geisel administration would find an improve- ment in Bolivian-Chilean relations attractive on several counts. Brazil basically wants to see both military regimes strengthened. Even partial recon- ciliation would earn Brazil prestige as an interna- tional arbiter, and the fact that the two presidents are meeting on Brazilian soil will help. Finally, a possible Chilean concession to Bolivia on access to the sea might involve internationalization of a port in northern Chile, a development that Brazil might view as an opportunity for economic gain and increased influence in general. Chile is anxious to attract foreign investment to its northern bor- der region, and the junta probably believes that a Brazilian economic stake in the area would help discourage Peruvian incursions. Mar 15 , 1974 Central Intelligence Bulletin 25X1 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 25X1 Approved For elease 2004/07/08: CIA-RDP79T00975A0 UGANDA-CZECHOSLOVAKIA: Prague is following Moscow's lead in reinstating military deliveries t Uganda. After a hiatus of several years, Soviet military shipments began again last November when armored personnel carriers, artillery, tanks, and fighter aircraft were delivered. Between 1965 and 1970, Prague and Moscow pro- vided Uganda with a total of $13 million worth of military equipment. Following the coup that brought President Amin to power three years ago, however, relations became strained, the military aid program was discontinued, and all Soviet and most Czech mil- itary technicians were withdrawn. Relations began to improve in late 1972 when Amin announced his hope that Soviet military aid would resume. Resumption of military deliveries by Moscow and Prague reflects a bid for influence with the Amin regime, whose relations with London, Washing- ton, and Tel Aviv are deteriorating. Amin has had to turn to Communist countries for military aid, because Western countries are reluctant to provide it. Kenya and Tanzania do not trust the mercurial Ugandan leader. Their uneasiness will increase as Uganda acquires more arms, although Amin apparently is not planning any military action. Mar 15, 1974 Central Intelligence Bulletin 25X1 25X1 25X1 25X1- 25X1 25X1 Appr JAPAN: Overseas borrowing by Japanese firms will expand rapidly over the next several months. The Ministry of Finance has announced that the gov- ernment will permit domestic firms to bring in about $390 million in foreign loans in the second quarter of this year to help them finance higher fuel costs. This is in addition to the $260 million in such loans permitted during the first quarter. Only power com- panies, steel producers, and shipbuilders have thus far been allowed to raise foreign loans and bring the funds into Japan. The dollar inflows resulting from this borrow- ing will help reduce Japan's expected balance-of- payments deficit during the period and ease the downward pressure on the yen. Mar 15, 1974 Central Intelligence Bulletin 4 2571 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975A026200200001-8 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 1 1 25X1 A0 proved For Release 2004/07/08 : CIA-RDP79T00975A02620020q FOR THE RECORD 25X1 25X1 25X1 25X1 Romania-Argentina: President Ceausescu signed several agreements during his recent visit to Argen- tina, including a $100-million economic credit, Ro- mania's largest commitment to a South American nation. The credit will be used in the mining, agricultural, and petroleum sectors. A $37-million contract for petroleum equi ment already has been signed under the credits. Portuguese Guinea: The self-proclaimed rebel government of Guinea-Bissau, which is challenging Lisbon's control of Portuguese Guinea, has been ac- corded observer status in the United Nations. This will allow it to send a delegation to the General Assembly on a nonvoting basis. The rebel government apparently hopes to obtain full membership in the UN next fall. Since proclaiming its "independence" last September, the rebel government has been recognized by about 70 African, Communist, and third world coun- tries, and has been admitted to the Organization of African Ppity and the UN Food and Agricultural Organ- ization. Mar 15, 1974 Central Intelligence Bulletin 21 Approved For Release 2004/07/08 : CIA-RDP79T00975A026200200001-8 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8 Top Secret Top Secret Approved For Release 2004/07/08 : CIA-RDP79T00975AO26200200001-8