NATIONAL INTELLIGENCE BULLETIN
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Top Secret
STAT
swig M1 =1
National Intelligence
Bulletin
State Dept. review
completed.
DIA review
completed.
Top Secret
N2 640
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National Intelligence Bulletin
September 30, 1974
CONTENTS
PORTUGAL: President Spinola loses in test of strength
with left. (Page 1)
JAPAN - NORTH VIETNAM: Agreement on establishing
Japanese embassy in Hanoi. (Page 5)
NIGERIA: Gowon expected to make policy declaration.
(Page 6)
ETHIOPIA: Political assessment. (Page 8)
INDIA: Tight grain situation. (Page 11)
USSR: Fifteen-year plan gives priority to Siberia,
agriculture, energy, and consumer welfare. (Page 13)
INTERNATIONAL FINANCE: West Germans, British lean
toward establishment of international bank to recycle
oil money. (Page 14)
PERU: Dissident groups increasing antigovernment
activities. (Page 15)
FOR THE RECORD: (Page 16)
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National Intelligence Bulletin September 30, 1974
PORTUGAL
Prime Minister Brigadier General Vasco Goncalves
told the Portuguese people, in a television address
late last night, that they had just lived through "a
first full-fledged attack by reaction" on the govern-
ment set up after the coup on April 25. He said the
pro-Spinola demonstration scheduled for September 28,
the cancellation of which triggered two days of ten-
sions, was directed against the Armed Forces Movement.
Goncalves assured his listeners that the country's vig-
ilant response had strengthened the unity between the
armed forces and the Portuguese people and improved the
conditions for the development of democracy in Portugal.
Goncalves defended the government's achievements, par-
ticularly the decolonization policies in Africa, and
re-emphasized the determination of the Armed Forces
Movement to carry out its program and to avoid civil
war in Portugal "above all."
The Prime Minister did not refer to President
Antonio de Spinola, who is scheduled to address the
nation at 5 am. (EDT) today.
The political temperature began rising on Saturday
when the Armed Forces Movement, which is dominated by
young, left-leaning officers, persuaded President
Spinola to cancel a political rally that had been
billed as a pro-Spinola demonstration by the "silent ma-
jority." The movement, and virtually all other polit-
ical forces to the left of center, regarded the rally
as the beginning of an effort by the political right
to eventually regain power in Portugal.
The sponsors of the rally probably were hoping, in
fact, for a large demonstration in favor of Spinola that
would help him in his continuing contest for power with
Premier Goncalves, one of the leaders of the movement.
Rightists may have planned to provoke violence at the
rally, and this could have been used by Spinola as evi-
dence that the government could not maintain order and
should be replaced by one that could.
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National Intelligence Bulletin
September 30, 1974
Spinola met yesterday with the Coordinating Commit-
tee of the Armed Forces Movement, presumably to discuss
the status of the government. It seems certain that the
movement is insisting on curbing Spinola's authority and
increasing its own. A communique issued by the movement
yesterday said the object of the meeting is "to reach the
logical political decisions arising from the de facto
situation that has been, created."'
Spinola has been aided in previous disputes with
the left by chief of staff General Costa Gomes, who is
highly respected throughout the armed forces. On this
occasion, Costa Gomes appears at the last moment to have
thrown his weight against the rally. Without the support
of Costa Gomes in the future, Spinola's position will
be seriously weakened.
Another effect of the developments over the week-
end will be to reduce the chances of an orderly campaign
leading to the scheduled election next March. Regardless
of what ulterior motives they may have had, conservatives
have been prevented from having a political rally at a
time when leftist demonstrations are commonplace. Polit-
ical parties of the center and right, which have just
begun to emerge, may conclude that they cannot gain power
except by force.
The affair also demonstrated once again that the
left, and the Communist Party in particular, is far better
organized than any other political group. The Communists
mobilized all of their considerable assets in the media
and in labor to achieve their objectives. They also
effectively sealed off access to Lisbon in order to keep
attendance at the rally low. Leftist vigilantes were
observed with Communist Party armbands directing traffic
and searching cars. According to the US consul in Oporto,
Communist Party members were able to stop all railroad
traffic from the north.
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National Intelligence Bulletin September 30, 1974
JAPAN - NORTH VIETNAM
Tokyo and Hanoi have agreed "in principle" to the
establishment of a Japanese embassy in North Vietnam
and to a delay in the final decision on Japanese aid.
Although no date has been set for the opening of the
embassy, Tokyo hopes to sign a written agreement within
the next several weeks.
The Japanese government will immediately give North
Vietnam about $16 million in aid and will settle in
future negotiations the difference between Tokyo's total
offer of some $40 million and Hanoi's request for $49
million. No further mention will be made of reparations
payments.
Hanoi's demand that Tokyo recognize the PRG, a
stumbling block to the exchange of embassies after Japa-
nese recognition of the North in September 1973, has
been dropped. Hanoi is insisting that the final agree-
ment express a Japanese willingness to facilitate visits
that
of PRG representatives, but Tokyo hopes to ensure
the phraseology not imply even a limited recognition of
the Viet Cong government.
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National Intelligence Bulletin
NIGERIA
September 30, 1974
Nigeria tomorrow will mark the 14th anniversary of
its independence--an occasion General Gowon usually uses
to review the country's problems and make major policy
declarations. This year, the military government is
faced with some of its most urgent economic and political
decisions since the end of the civil war in January 1970.
Internal tensions have been gradually building for
several months, and Gowon's pronouncements will receive
especially close scrutiny. There are no indications
that serious trouble is imminent, but it will be impor-
tant for Gowon to succeed in reassuring various dissat-
isfied groups that steps will be taken to relieve their
discontent.
The country's top policy-making body--the Supreme
Military Council--ended several days of deliberation
this weekend. Plans reportedly have been approved for
a major shuffle of senior officers and civilians in the
government. This apparently will. involve the replace-
ment of most, if not all, state military governors and
federal commissioners with army and police officers.
The decision to replace senior officials in the
government probably was made in part, to open slots for
grumbling middle-grade officers. Also, the image of
the military government has been tarnished by recent
press charges of corruption against many officials to
be replaced. Gowon apparently intends to keep key mili-
tary service chiefs in place, and some of the outgoing
military governors may be given posts as commissioners.
The government is also likely to lift its two-
year-old wage freeze. This may be followed by sizable
pay raises for the labor force. Nigerian workers have
been hard hit by inflation. Unless their wages are
improved soon, widespread labor unrest is probable, de-
spite the military's ban on strikes.
Gowon tomorrow may also clarify the government's
intentions toward honoring its pledcte to return Nigeria
to civilian rule in 1976.
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National Intelligence Bulletin September 30, 1974
a majority of the members of the Supreme Mili-
tary Council have recently spoken in favor of the mili-
tary's remaining in power beyond 1976. It is not clear
whether Gowon and his colleagues mean that military rule
might be extended for a few more years or retained indef-
initely. There is growing suspicion among many Nigerians,
in particular former politicians and students, that the
military has no intention of stepping down, and Gowon
will have to allay such fears in any pronouncement he
makes.
Gowon may well back away from the target date of
1976 for restoring Nigeria to civilian rule. The govern-
ment has moved forward since 1970 on only three points
of a nine-part program of political and economic changes
Gowon insists must be completed by 1976. The key to
more rapid progress is the availability in the near fu-
ture of politically acceptable census figures.
The provisional census results announced last May
have stirred old tribal and regional animosities, which
could threaten Nigeria's stability if allowed to get out
of hand. Infighting by former politicians over the cen-
sus issue culminated recently in the resignation of a
federal commissioner on corruption charges. This prob-
ably has heightened the military's basic distrust of
Nigeria's old guard politicians. It is now open to ques-
tion whether the ban on politics in effect since 1966
will be lifted--'as th.e military apparently planned to do
this fall--in order to facilitate the organization of
national political parties.
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National Intelligence Bulletin September 30, 1974
The Ethiopian radio announced on Saturday that
Lieutenant General Aman Mikael Andom has been replaced
as armed forces chief of staff. He will retain his
other three posts--titular head of the government, de-
fense minister, and chairman of the predominantly ci-
vilian cabinet.
The change occurred against the background of re-
ported antagonism between Aman and members of the still
shadowy Armed Forces Coordinating Committee. Aman's
rivals may have compelled him to step down as chief of
staff so as to decrease his power or to reduce the dan-
ger that he might use his top command position to order
troops to do his bidding. On the other hand, Aman may
have willingly given up the job in order to have more
time for his three civilian posts, which he may consider
enhance his political power base.
During the past two weeks, a. proclamation of the
new government and a press conference by Aman revealed
the status of the military committee and Aman's rela-
tionship to it. The 120-man committee, consisting of
persons ranging from private to major and elected from
all branches of the army and police, was described by
Arran as the nation's supreme authority. The proclama-
tion and the general's comments made it clear that he
was not the head, or even a member, of the ruling commit-
tee. There have been unconfirmed. reports that a smaller
group, perhaps even including some persons not on the
committee, is ruling from behind the scenes.
The nature of Ethiopian society makes it likely
that whatever group is in charge is divided in various
ways: personal rivalries, ethnic differences, and as-
sociations based on loyalties to region, social class,
and military unit. The ruling group also appears to be
divided on larger political questions, such as the future
of Haile Selassie and the monarchial institution, whether
and when power should be returned to civilians, and
Ethiopia's future ties with the US. A faction of the
committee is reported to be pushing for the continuation
of military rule for at least another two years.
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National Intelligence Bulletin
September 30, 1974
Aman is a Tigrean--one of Ethiopia's most important
ethnic groups, and one which has regional ties to Eritrea.
His adversaries with different ethnic and regional affil-
iations dislike him for this reason. They reportedly
also resent the prestige and popularity he has gained as
the leading identified member of the military government.
During the past two months Aman has traveled to all parts
of the country, reviewing military units and drawing
large and enthusiastic crowds.
The new armed forces chief of staff is Major General
Gizaw Belayneh. The 52-year-old Gizaw, an Amhara, is
considered by US military observers to be an outstanding
officer. He has had combat leadership and some training
in the US.
Under the Haile Selassie regime, Gizaw was reported
not to enjoy the full confidence of the emperor because
of ties with officers involved in the 1960 coup attempt
and because of his advocacy of social reforms.
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India: Area With Below Normal Rainfall
IA CADIVF
!`;! sNDS
MALDIVES COLOMBO:
0 .100. 200 300 Mtles
TT-T
9 100 200 300 kilometer
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RANGOONp
DAM AN
Is!.ANDS
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National Intelligence Bulletin
September 30, 1974
New Delhi once again faces a tight grain situation
because of a poor summer monsoon.
Rainfall throughout northern India between July 1
and mid-September has been well below average, with
Gujarat and parts of other northern states especially
short. They now face several months of drought. About
two thirds of annual grain production is grown during
the monsoon period from June through September and har-
vested from October through December. The monsoon also
provides soil moisture for the winter sowing of spring
crops and much of the water stored for irrigation.
The US embassy projects this fall's grain harvest
at between 58 and 62 million tons. The current food-
grain situation is analogous to 1972, when India last
experienced a poor monsoon. While this fall's harvest
is expected to be 1 to 5 million tons larger than the
1972 fall harvest of 57 million tons, India is worse
off. Government stocks last July were only 4 million
tons, compared with 9 million tons in July 1972, and
the population has grown by 26 million persons. The
outlook is not as bad as the situation during the mid-
1960s, however, when successive drought years required
grain imports of 20 million tons during a two-year period.
The poor fall harvest will increase pressure on
the official grain-distribution system, which provides
subsidized grain sales mostly in urban working-class
areas. Urban demand for grain from government ration
shops will increase as free market supplies decline.
Hard-hit rural areas also will need government support.
Following the poor 1972 monsoon, New Delhi provided
11.7 million tons of grain to the subsidized distribu-
tion system. A minimum of 12 million tons will be
needed before June 1975 to avoid widespread unrest.
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National Intelligence Bulletin September 30, 1974
Judicious distribution of government grain should
reduce the incidence of food riots in urban areas. New
Delhi will not be able to supply many of the isolated
rural drought areas, but, these areas are usually less
vocal in their protests.
To get 12 million tons of grain for its distribu-
tion system, the government will :need 6 million tons of
imports. To date, India. has arranged to import 3.1 mil-
lion tons. The other 6 million will come from stocks,
including projected procurement of 2 million tons from
the fall harvest.
Indian officials obviously prefer food aid over
commercial purchases. India already faces a sharp in-
crease in its trade deficit as a result of higher im-
port costs of food, oil, fertilizer, and other commod-
ities. New Delhi is reluctant to use its foreign ex-
change reserves, in part. because of the ever-present
threat of successive crop failures.
Prospects for large-scale aid are uncertain. New
Delhi has requested 1 million tons of EC wh.Eeat--half
as aid, half for commercial purchase. According to
press reports, this grain will be provided. New Delhi
is seeking a repeat of last year's 2-million-ton grain
loan from the USSR, but Moscow appears unwilling to
make any commitment until its own situation becomes
clearer.
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National Intelligence Bulletin September 30, 1974
A Tass article recently revealed a brief outline of
the Soviets' 15-year plan (1976-90). Priority attention
is given to developing Siberia, expanding agriculture in
the non-black-soil zone, exploiting energy reserves, and
improving consumer welfare--the "prime target."
The Siberian development projects include further
exploitation of petroleum and gas deposits; creation of
a "territorial production complex" in Krasnoyarsk com-
prising a hydroelectric power station, a railroad car
factory, and an aluminum plant, among other things; and
construction of the Baykal-Amur railway through rich ore
and timber land. The farm program for the non-black-soil
zone, announced by Brezhnev in March, will be allocated
35 billion rubles for land reclamation and enrichment.
The new plan also promises the Soviet consumer "an abun-
dance" of high-quality foods, consumer goods, and better
housing, with a corresponding growth in real income.
The announced projects show no radical departure
from trends observed in the current five-year plan.
They indicate, however, that Soviet economic development
is becoming ever more costly. Siberian development,
for example, requires the transfer of scarce men and
materials across vast distances to the raw material sites
and then the transport of the final, product back to major
population centers. Moreover, the successful extraction
of oil and gas in the harsh Siberian climate and terrain
will require the import of advanced technology from the
West. In the agricultural sector, the Soviets are now
forced to turn to land which requires large capital in-
vestment to make it productive.
Soviet planning chief Baybakov claimed in July that
the 1975 plan would be completed by August 15, and that
the 15-year plan would be drawn up by November 15. This
means completion at the top level only, however, and a
year or more may pass before specific goals are publicly
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National Intelligence Bulletin September 30, 1974
INTERNATIONAL FINANCE
West Germany has announced that it is :Leaning to-
ward establishment of an international bank to attract
surplus oil revenues from oil exporters and to relend
the money to governments and businesses in oil-importing
countries. The British also have come out in favor of a
multilateral recycling plan. Both London and Bonn appar-
ently intend to bring up discussions on var_Lous methods
of multilateral recycling at International Monetary Fund
meetings this week.
The West Germans would like for several reasons to
see an international recycling scheme adopted. They feel
that some sort of multinational recycling effort is needed
to aid those countries that are unable to finance their
deficits on their own. A large multilateral plan could
provide Germany's trading partners with needed financing
and prevent some of them from possibly adopting restric-
tive trade measures.
The adoption of a multilateral scheme would prob-
ably make it unnecessary for the EC to establish a lim-
ited recycling effort of its own. Chancellor Schmidt
recently indicated privately that, he opposes the EC
plan--for which Germany, because of its strong financial
position, would be the main de facto guarantor.
Britain favors a multilateral recycling plan for
two reasons. First, the British may find it necessary
in the future to borrow from such. an institution. At
this time, much of Britain's deficit is financed by de-
posits from oil producers and concessionaires. There
are some indications that the UK will receive a smaller
share of these deposits in the future. In addition,
London is concerned about the stability of the Eurocur-
rency market, which is based mainly in London. Euro-
currency banks--banks which hold deposits of foreign
currencies--are currently shouldering a large share of
the burden of recycling oil revenues.
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National Intelligence Bulletin September 30, 1974
? Dissident groups are stepping up their antigovern-
ment activities, possibly in anticipation of the sixth
anniversary of military rule on October 3. According
to a press report, one group has called on Peruvians to
observe a day of mourning to protest the "death of free-
dom in Peru."
The rising civilian opposition may presage a more
serious long-term problem for the Velasco government than
has previous antigovernment activity. For the first time
since the military took power, there is evidence that
middle-class groups are seriously attempting to institute
a general antimilitary campaign rather than simply pro-
test specific government policies.
Last August, following the government's expropria-
tion of the press, middle-class dissidents were in the
forefront of antigovernment disturbances. In the wake
of these incidents, opponents of the military reportedly
began formulating plans for a long-term "psychological.
terrorism" campaign against radical military leaders.
A number of minor bomb blasts in the Lima and Arequipa
areas in recent days could signal the start of such a
campaign. In addition, for the first time, large quan-
tities of antimilitary propaganda are being distributed
on the eve of a major anniversary observance.
A sudden surge of serious terrorist activity is not
likely, however, because the dissidents' plans do not ap-
pear to be very far along, and the recent incidents will
cause the government crease its vigilance against
opposition violence.
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National Intelligence Bulletin
September 30, 1974
USSR-Poland: Soviet Foreign Minister Gromyko ar-
rived in Warsaw last night from New York, where he had
been attending the UN General Assembly meeting. His of-
ficial visit to Poland, announced earlier this month,
probably will be brief and dominated by a review with
Polish leaders of his talks with top-level US officials.
Polish party chief Gierek and Foreign Minister Olszowski
are to make an official visit to Washington next week.
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