CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026400200001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: May 13, 2004
• Sequence Number: 1
• Publication Date: May 18, 1974
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
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State Dept. review completed
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May 18, 1974
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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May 18, 1974
Central Intelligence Bulletin
CONTENTS
LAOS: Communists apparently to use allied prisoners
to exert pressure on Washington and Bangkok. (Page 3)
SOUTH VIETNAM: Saigon responds to Communist attacks
with air 'strikes. (Page 4)
USSR-CHINA: Hints that Moscow hopes to avoid major
flare-up with China prior to summit with US. (Page 5)
USSR-CSCE: Soviets may be wavering on July date tar
final stage. (Page 8)
USSR-ARGENTINA: Soviets making major effort to im-
prove relations. (Page 9)
JAPAN-CHINA: Way is open for further improvement
in relations. (Page 10)
INDIA: Poor spring harvest prompts importation of
foreign grain. (Page 12)
BURMA: Labor unrest concerns government. (Page 13)
PORTUGAL - PORTUGUESE GUINEA: Rebels announce cease-
fire talks to be held in London. (Page 14)
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LAOS: The Lao Communists apparently intend to
use some allied prisoners as bargaining chips to ex-
ert pressure on Washington and Ban kok.
the Communists will. continue to hold
captive e and the prisoner exchange deadline of
June 4 US and Thai prisoners, particularly
those captured a ter the February 1973 cease-fire
agreement. US civilian contract pilot Emmet Kay is
the only American prisoner to fall within the post-
agreement category and the only one the Pathet Lao
have admitted holding.
Thel does not indicate that
additional US prisoners are presently being detained.
Another four Americans, however, are believed to have
been captured in Laos prior to the agreement, and
314 are listed as missing in action.
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I he Communists plan
to link the release of these prisoners to the cessa-
tion of US aerial reconnaissancq~. flights over Lao
territory, to the disbanding of 25X1
intelligence organizations in the twin capitals
of Vientiane and Luang Prabang, and to the dissolution
of Paces.
I apprehension
on the part of the Pathet Lao that the U and Thailand
do not intend to comply fully with the provisions of
the 1973 Lao Accords. These fears probably stem from
the Communists' recognition of their own violation of
the accords.
Heavy stress is p
the cessation of overf ights along the eastern trail
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Moreover
Personnel captured after the cease-fire agree-
ment constitute proof of continued US and Thai "ag-
gression" against Laos and that this argument might
be used to counter anticipated allied demands for the
withdrawal of all North Vietnamese troops.
SOUTH VIETNAM: Communist military activity re-
mained higher than normal yesterday. The most signif-
icant action was centered in Binh Duong Province,
where government forces were hit by small-scale local-
ized attacks.
The South Vietnamese Military Region 2 commander
has responded to the Communist attacks in Kontum
Province by ordering air strikes against one of two
Communist-held district towns in the northern part
of the province. In addition, harassing attacks are
being planned against a nearby North Vietnamese base
area in order to divert Communist forces that appear
to be moving toward government positions.
Some South Vietnamese military units, meanwhile,
are being shifted in order to engage main-force
Communist units that pose a threat to government
forces in 4oth he highlands and the provinces north
of Saigon.
May 18, 1974
Central Intelligence Bulletin 4
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USSR-CHINA: A lengthy article in Izvestia on
Sino-Soviet relations suggests Moscow hopes to avoid
any major flare-up with China prior to the summit
meeting with the US.
The article advanced the standard Soviet argu-
ments about China's intransigence and catalogued
Moscow's alleged attempts to improve relations. The
article claimed that Peking turned down a Soviet
offer in June 1973 to hold summit-level talks, but
noted that this and all other offers on such matters
as a nonaggression pact still stand.
Izvestia also asserted there are "signs" that
many Chi-'~nese leaders do not support Mao's anti-Soviet
policies. Whether or not the Soviets believe this,
the allegation that such a faction might eventually
come to power could be used to counter arguments
that the Soviet leadership should take a tougher
line against Peking. The mention of such a faction,
however, and the reference to former defense min-
ister Lin Piao will not make it easier for the
present Chinese leadership to deal leniently with
the Soviet helicopter crew China has detained since
March 14.
The article was signed by a regular and not
particularly prestigious commentator on Sino-Soviet
affairs, but the frequent references to the direc-
tives of the Central Committee probably were designed
to give it a more authoritative ring. As such, it
may have been intended to balance the emotional
anti-Chinese articles on the helicopter incident of
March 14 that appeared in Red Star and Literary
Gazette last week. Those articles and the earlier,
mildly threatening language of the third Soviet
protest note to the Chinese raised the possibility
that Moscow might be preparing to use the helicopter
incident for an anti-Chinese campaign.
The day after the Izvestia article appeared,
the Soviets appealed to the In International Red Cross
for assistance in securing the release of the heli-
copter crew. This was the first time the Soviets
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had asked an international body for aid in dealing
with the Chinese. The appeal provides further evi-
dence the USSR has decided that the helicopter in-
cident should be handled in a way that will not ag-
gravate tensions along the Sino-Soviet border.
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USSR-CSCE: The Soviets may be wavering in their
determination to hold the final stage of the European
Security Conference in July. Soviet CSCE envoy
Mendelevich reportedly asked his Norwegian counter-
part how the West would feel if the present (second)
phase was recessed until autumn. Mendelevich was
careful to maintain that the Soviets still prefer a
July date for the final stage and that his inquiry
represented only "contingency planning," which it
probably was.
The Soviets have persistently advocated a rapid
conclusion to CSCE, but their negotiating posture
has been rigid since the talks resumed after an
Easter recess. The conference is now stalemated on
issues of "freer movement" of people and ideas, and
much work remains to be done on other matters, in-
cluding some key principles.
Western delegations have taken the position that
the timing and level of the concluding phase should
depend on the results of the current negotiations.
Even if Soviet concessions are forthcoming, they may
be too late to enable the West Europeans to reach
agreement on a finale in July.
The Soviets probably would still like to hold
the conference in July, but Mendelevich's remarks
suggest that they may not be ready to offer sufficient
concessions to make this a realistic possibility.
The concessions demanded by the West touch sensitive
areas and are bound to be controversial in Moscow.
Recent leadership changes in West Germany and France
may have added to Soviet caution. At the least,
Mendelevich's remarks may have been intended to con-
vince Western representatives that the Soviets are
not negotiating under time pressure.
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USSR-ARGENTINA: The Soviets are making a major
effort to improve relations with Argentina. Eco-
nomics Minister Gelbard received red-carpet treat-
ment during his visit to Moscow last week. He met
with top Soviet leaders, and his stay was given
prominent treatment in the Soviet media. Gelbard's
visit was also the occasion for an announcement that
President Peron had accepted an invitation to visit
the Soviet Union. The Soviets, moreover, obtained
an Argentine expression of interest in entering some
form of association, as yet undetermined, with CEMA.
The discussions centered on expanding economic
relations, including the completion of a $75-million
contract for Soviet turbines for the Salto Grande
hydroelectric project. Moscow has offered credits
repayable over 10 years at 4.5 to 5.5 percent, which
is below commercial interest rates, to cover the
purchase.
Negotiations are continuing for Soviet par-
ticipation in several other projects,' including a
fisheries complex, a steel mill, and power projects.
The Soviets reportedly also agreed to purchase 100,000
metric tons of Argentine! meat, as well as rice and
fruits. The value of these contracts could total
$200 million--about seven times the annual Soviet
purchases of Argentine goods in the past few years.
The USSR views the economic agreements as a
vehicle for promoting closer tries with Argentina,
and they could serve as a precedent for a similar
movement in Soviet relations with other Latin
American countries. Moscow probably believes that
US influence may be waning in some South American
countries, and that opportunities exist for expanding
its own influence in the area. Improved relations
with Argentina, as with Peru, could help overcome
the setback in Chile and prove that Moscow's "peace
program" is capable of producing good results in
Latin America.
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JAPAN-CHINA: Final ratification of the Sino-
Japanese air agreement by the Japanese Diet on May 15
has opened the way for further improvement in bilat-
eral relations.
Both sides gained political advantage from the
air agreement. Peking has clearly stayed ahead of
Moscow in strengthening ties with Tokyo as a result
of the air agreement. China recently offered to sell
Japan a significant amount of oil on a long-term
basis, while Japanese negotiations with the Soviets
over investment in developing Siberian oil resources
continue to drag on.
Even before the air agreement was achieved, eco-
nomic relations between China and Japan were booming,
with trade running more than 50 percent over that of
the previous year. Trade reached a record $2 billion
in 1973.
Tokyo has gained useful leverage for dealing
with Moscow as a result of the air agreement. The
Soviets cannot help but be concerned that Japan and
China are drawing closer together. Tokyo will seek
to exploit this concern, especially in a variety of
economic negotiations that are now under way for
Japanese investment in developing Siberian resources.
Domestically, Prime Minister Tanaka has gained
one of his major political objectives and undercut
domestic criticism of his government. The right-wing
Seirankai group of the Liberal Democratic Party,
which was using conservative opposition to the air
agreement to attack Tanaka's leadership, has already
found its influence diminished as a result of its
failure to stop the treaty.
As for Taiwan, Tokyo is hopeful that some form
of an air link can be restored. Taipei may be waiting
for an expected Japanese cabinet reshuffle after the
Upper House elections on July 7--in which Ohira will
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probably depart as foreign minister--before it re-
sponds to Tokyo's overtures. Even if air ties are
resumed soon, however, there may be some lasting eco-
nomic damage, because many Japanese investors will
be more cautious in the future.
Both sides have gained political advantage from
the air agreement. Peking has established an impor-
tant precedent by insisting that Japan refuse to
recognize Taiwan's China Air Lines as a national flag
airline. Peking can use this denial of Taipei's
sovereignty as a precedent in future negotiations
with other countries that want. civil air ties with
China but are reluctant to break off flights to Tai-
wan. Conversely, the precedent of this agreement
would permit other countries to argue that they could
maintain private air service with Taiwan after nego-
tiating a governmental aviation agreement with Peking.
A Japanese delegation was set to leave for
Peking on May 15 to complete negotiations on a fish-
eries agreement, which will be followed by a maritime
pact. The Japanese announced early this week that
they would soon begin work on a Japanese draft of a
treaty of peace and friendship, but negotiation of
this pact will be a long- process.
It is improbable that the common desire for im-
proved commercial and other relations will lead to
significantly closer political. ties between the two
countries. While the major emphasis in the current
Chinese approach to Japan is positive, there are
signs of continuing Chinese wariness toward Japan,
such as attacks in the Chinese media on the right-win
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INDIA: Since early April, New Delhi has con-
tracted for 1.1 million tons of foreign grain because
of the poor spring harvest. India is concentrating
%ts purchases in the US wheat market, where relatively
.ow prices and ready availabilities prevail. Wheat
purchases from the US already total nearly 900,000
tons--for shipment starting in June--and are expected
to rise tc a million tons over the next few weeks.
The USSR is unwilling at this time to go beyond the
2-million-ton wheat loan committed last fall.
Indian grain imports contracted or delivered so
far this year total 3.5 million tons. The govern-
ment's subsidized distribution program probably will
require imports of 4 to 5 million tons this year, com-
pared with 4.2 million tons last year.
The US embassy estimates the spring wheat har-
vest, which normally constitutes about a quarter of
domestic grain production, at 22.5 million tons--2.4
million less than last year and 3.9 million tons less
than two years ago. Poor weather and irrigation dis-
ruptions owing to energy shortages reduced wheat
yields.
Nationalization of the wheat trade last year also
adversely affected the crop. Despite excellent sowing
conditions, wheat acreage barely exceeded last year's
because some farmers switched from wheat to more
profitable crops, thus interrupting the trend of large
annual increases in wheat acreage that had prevailed
since the mid-1960s.
in connection with India's immediate food prob-
lems, the ten-day-old rail strike is hampering the
internal distribution system, but limited supplies
are getting through on trains being operated by para-
military, mobilized reserves, and non-strikers. It
appears that the government will likely break the
strike by simply refusing to negotiate unless the
strike is called off, and by threatening strikers
with the loss of their jobs. F__ I
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BURMA: Growing labor unrest is causing con-
cern in the Burmese government. During the past
several weeks, strikes or other disturbances have
taken place at five factories north of Rangoon, and
there are indications that the unrest may spread to
plants in the capital. Workers are alarmed by the
increasing gap between wages and prices, and most of
the strikes center on demands for larger rations of
rice.
Thus far, the government has been able to end
most of the disturbances through a conciliatory ap-
proach. It has promised the strikers that their
demands will be met, and reportedly will announce
soon that the rice distribution to state employees
will be more than doubled.
The government's strategy may calm the situa-
tion, at least temporarily, but the poor state of
the economy could lead to further trouble. Until
the recent unrest, strikes had been rare in Burma,
but success in having their grievances met may en-
courage the workers to make other demands.
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PORTUGAL - PORTUGUESE GUINEA: Negotiations
for a cease-fire between Lisbon and the insurgent
movement in Portuguese Guinea will begin in London
on May 25, according to an announcement by the rebel
radio. The talks reportedly were agreed upon during
a meeting on May 16 in Dakar, Senegal, between Portu-
guese Foreign Minister Soares and rebel Secretary
General Pereira.
The announcement follows by less than a week a
rebel offer to negotiate, on condition that Lisbon
recognize the "right of independence" for the Afri-
can territories. In a statement following the Dakar
meeting, Snares said that Lisbon would "loyally ac-
cept all the consequences" of self-determination in
Portuguese Guinea--implying acceptance of possible
independence. Despite Soares' failure to include
the other territories, the statement apparently was
enough to meet the rebels' condition.
The announcement is a major breakthrough in
the long military stalemate in the territory, and
the chances for a cease-fire appear good. Beyond
that, however, the two sides still have to work out
the details of Portuguese Guinea's future relation-
ship with Lisbon. Lisbon probably would not be
averse to giving up Portuguese Guinea, because its
political and economic interests in the territory
are negligible. The manner in which this is done
is important, however, because it could complicate
Lisbon's relations with Angola and Mozambique, with
which it wishes to retain close ties because of
profitable economic interests there.
May 18, 1974
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