NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026700010024-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 16, 2016
• Document Release Date: January 4, 2005
• Sequence Number: 24
• Publication Date: July 1, 1974
• Content Type: REPORT

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Top Secret
National Intelligence
Bulletin
Top Secret
1 July 1974
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National Intelligence Bulletin
July 1, 1974
CONTENTS
CHINA: Peking issues official policy statement marking
anniversary of Chinese Communist Party. (Page 1)
ETHIOPIA: Military moving to end conservative maneuver-
ing for power. (Page 2)
ARGENTINA: Military and political leaders supporting
temporary succession of Mrs. Peron as chief of state.
(Page 4)
LAOS: New coalition troubled by Communist demands for
recognition of the Provisional Revolutionary Government.
(Page 5)
CAMBODIA: Government forces northwest of Phnom Penh on
Route 5 continue to perform well. (Page 7)
CANADA: Election likely to produce another minority
government. (Page 8)
VENEZUELA: Caracas to increase tax reference prices by
5 percent. (Page 10)
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National Intelligence Bulletin July 1, 1974
For the first time in three years, Peking has issued
an official policy statement to mark today's anniversary
of the founding of the Chinese Communist Party. An edi-
torial in People's Daily used the occasion to make a
strong bid for firm party leadership of the current anti-
Confucius campaign.
Although the editorial acknowledged that some offi-
cials in the party will be criticized by others and may
have to criticize themselves during the campaign, it
stated that this activity "does not in any way imply that
party leadership may be weakened." The editorial fore-
casts no early end to the campaign, directing the whole
party to make "tremendous" efforts to sustain it.
The editorial also urged party officials to give
guidance to those outside the party who support "certain
wrong ideas." This may be a reference to the criticism
of some party officials that has been appearing in polit-
ical wall posters in Peking and in the provinces. Most
of the posters have been written by ordinary factory
workers or others who are not party members.
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National Intelligence Bulletin July 1, 1974
ETHIOPIA
Military elements that support political and eco-
nomic change are making a determined effort to consoli-
date their control and end the maneuvering for power by
their conservative opponents.
Late Saturday, military units in Addis Ababa, sup-
ported by the police and other security forces, began
arresting the highest ranking members of the nobility,
The Emperor is unlikely to be able to stave off this
latest move and will suffer a further erosion of his al-
ready circumscribed power,
A special committee made up of representatives of
all military and security forces in Addis Ababa is coor-
dinating the armed forces" activities in the capital.
The military has complete control of the city, and police
patrols are reported heavy. The committee seems to have
the support of important military commands in other parts
of the country, although these areas appear to remain
quiet.
The committee yesterday issued a communique saying
that those arrested had attempted to obstruct the smooth
functioning of the cabinet, Despite this indication of
support, the cabinet's authority and prestige have been
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National Intelligence Bulletin July 1, 1974
seriously undermined, and the military probably would
welcome the voluntary resignation of many of the min-
isters. The military moderates, even if they are suc-
cessful in isolating the conservatives, will have to
overcome divisions and indiscipline in their own ranks
before stability can be restored.
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National Intelligence Bulletin July 1, 1974
ARGENTINA
Military and political leaders are supporting the
temporary succession of Mrs. Peron as chief of state
during the illness of her husband. Nevertheless, if
Peron dies or is incapacitated for a long time, the armed
forces may be forced to play a more active role in order
to maintain public order.
Mrs. Peron has already expressed reluctance to as-
sume full presidential responsibilities. She lacks a
political base of her own and appears to recognize her
lack of experience and inability to cope with the coun-
try's grave problems. If Peron dies, she will probably
soon step aside in favor of Senate President Jose Allende,
her constitutional successor.
Military chiefs will be reluctant to exercise greater
authority as long as the country remains calm because
they recognize their unpopularity. Even though the
Peronist left has become increasingly alienated from the
party leadership, it is divided and aware of its polit-
ical weaknesses. It too will probably maintain a low
profile as long as Peron is alive.
The groups that are most likely to take advantage
of current circumstances are the extremist People's Rev-
olutionary Army, Peronist :Labor leaders, and right-win
Meanwhile, late medical bulletins indicate that
.there has been no substantial change in Peron's condition.
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National Intelligence Bulletin July 1, 1974
A major battle is shaping up in the new coalition
government over Communist demands for recognition of the
Viet Cong's Provisional Revolutionary Government. The
outcome will be an important test of Prime Minister
Souvanna's willingness and. ability to preserve Lao neu-
trality,
Apparently under strong pressure from Hanoi, the
Lao Communists are pushing the cabinet to recognize the
Provisional Revolutionary Government. At last week's
heated cabinet debate on this issue, Pathet Lao Deputy
Prime Minister Phoumi Vongvichit said that the coalition
might collapse if the non-Communist ministers failed to
join their Communist colleagues on the question.
Souvanna's legal adviser has interpreted Phoumi's
statement as a threat that the Pathet Lao might withdraw
from the coalition, and he claims the Prime Minister
shares this view. Although such a move by the Communists
seems most unlikely, Souvanna nonetheless is known to be
deeply disturbed over the divisive and deleterious ef-
fect the recognition issue is having on the coalition,
Given the Prime Minister's strong desire to preserve
harmony, he may deem it necessary to make at least some
gesture toward the Provisional Revolutionary Government.
ouvanna, however
may have consi er le difficulty
selling any compromise formula to non-Commmunist cabinet
members, I
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PHNOM "
PENN
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Lovek
Kompong Luong
Heavy fighting
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July 1, 1974
Government forces northwest of Phnom Penh on Route
5 continue to perform well..
Elements of the Cambodian army over the weekend re-
portedly inflicted heavy casualties on several Khmer Com-
munist units near the town of Kompong Luang. Government
troops are now trying to clear the remaining insurgent
interdiction point on Route 5 between Kompong Luong and
Phnom Penh. Farther north, Communist pressure against
the government base at Lovek has subsided after several
days of ground attacks and shellings against Lovek's
northern and southern defenses.
Communist attacks against the remote provincial
capital of Koh Kong on the! southwestern coast have also
fallen off. The arrival of reinforcements from the sea-
port of Kompong Som and some timely air and naval support
have helped to stabilize the situation at the town of
Koh Kong, which came under attack last week.
Elsewhere in
the southwest, the Communists are keeping up their harass-
ing attacks against two government garrisons on Route 4
west of Kompong Speu City.
Military action in the immediate Phnom Penh area
remains light. The Communists heavily shelled a Mekong
River resupply convoy en route to the capital from South
Vietnam on June 29, but only one of the convoy's 19 ves-
sels sustained any serious, damage.
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National Intelligence 'Bulletin July 1, 1974
The election on July 8 is likely to produce another
minority administration that could be led by either of
Canada's two major parties.
Seven weeks of hard-hitting campaigning has not pro-
duced any decisive trends. Inflation has been the main
campaign issue. The cost of living rose 9.1 percent in
1973, and the latest figures show it running at an annual
rate of 13 percent this year.
Progressive Conservative leader Robert Stanfield has
proposed an income and price freeze to be followed by a
more lasting program to combat inflation. Stanfield's
proposals, vigorously attacked by the other parties, have
received little support from the public. Prime Minister
Trudeau has stressed measures to increase corporate taxes
and protect hard-pressed consumers from the worst effects
of inflation. The New Democrats, the de facto junior
partner in the last government, have espoused variations
of Trudeau's promises and have added a proposal to estab-
lish a two-price system--domestic and international--for
basic commodities produced in Canada.
Recent nationwide opinion polls showing Trudeau's
Liberals edging ahead are misleading because they incor-
porate the very heavy majority Liberals always receive in
Quebec. The electoral overkill in Quebec, therefore, is
not as important as winning individual parliamentary con-
tests, which are expected to be close in many areas of the
country. In the key province of Ontario, Liberals, Tories,
and New Democrats each claim that their private polling
shows them doing well. About one third of Ontario's 88
parliamentary seats were won by less than 2,000 votes in
1972, and there will be many close three-way battles this
year. Party leaders will spend much of the remaining week
of campaigning in Ontario in hopes of tipping the balance
in these races.
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National Intelligence Bulletin
July 1, 1974
The nationalist-minded New Democrats have a good
chance of holding the parliamentary balance of power
again. In the last parliament, they kept the minority
Trudeau administration afloat by informally participa-
ting in the government--an arrangement that freed them
from the principle of collective responsibility, which
inhibits public criticism of government policies by gov-
ernment members. Recently, however, party leader David
Lewis stated that he did not expect new elections for
several years no matter what party headed a minority
government. He may be hinting that the New Democrats
would be prepared to join a formal coalition if an ac-
ceptable deal on policies and cabinet posts can be made.
Canadian-US relations surfaced on the margins of the
campaign recently when the US threatened to take retalia-
tory action against Canadian farm exports to the US un-
less Ottawa resumes importing US beef. This issue has
been receiving heavy--and sometimes emotional--media
coverage. Trudeau and Agriculture Minister Whelan have
reacted sharply in an obvious attempt to head off po-
tential opposition charges of knuckling under to the US.
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VENEZUELA
Venezuela has decided, effective today, to increase
tax reference prices by 5 percent. An increase in these
prices, which are used to calculate oil company taxes,
will mean higher prices for the consumer. The move is
more significant for its defiance of OPEC than for the
increased revenue it will bring to Caracas.
Oil ministry officials indicated last week that tax
rates also would be raised. No increase has yet been
announced; the Petroleum Intelligence Weekly, a reliable
oil journal, expects a 10-- to 15-percent increase.
OPEC members decided in the ministerial conference
in Quito last month to freeze prices through September
and to increase royalties by about 10 cents per barrel.
Venezuela, unhappy with that decision, favored higher
posted prices to compensate for inflation in the indus-
trialized nations and favored higher tax rates on the
oil companies to offset alleged excess profits.
Venezuela's price increase will add about 40 cents
per barrel, 30 cents above the OPEC increase. At the
current export rate, the government would gain only an
additional $200 million in revenue during the second
half of 1974; Caracas' total oil revenues are expected
to exceed $9 billion this year.
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