NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027100010038-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: May 11, 2006
• Sequence Number: 38
• Publication Date: November 9, 1974
• Content Type: REPORT

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National Intelligence
Bulletin
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National Intelligence Bulletin
November 9, 1974
CONTENTS
USSR: Soviets buy more from the West; equipment con-
tracts set record. (Page 1)
AUSTRIA: Kreisky to meet with President Ford next week.
(Page 2)
JAPAN: Atmosphere surrounding President Ford's trip
improving. (Page 3)
NORTH KOREA: Pyongyang shows signs of flexibility.
(Page 4)
SOUTH VIETNAM: Saigon calls on the Communists to drop
conditions holding up resumption of negotiations. (Page 5)
PORTUGAL: Government condemns leftists for sacking con-
servative party's headquarters. (Page 9)
NORWAY: Defense budget increase much lower than pro-
jected. (Page 10)
PAKISTAN: Assessment of damage to Tarbela Dam. (Page 11)
enable Cyprus Airways to continue operations. (Page 13)
USSR: Surface-to-air missile systems discussed. (Page 14)
FOR THE RECORD: (Page 15)
CYPRUS-UK-USSR: Moscow and London offer aid that would
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National Intelligence Bulletin
USSR
November 9, 1974
The USSR is expanding purchases in the West as a
result of the sharp rise in its hard currency earnings.
Contracts for Western plants and equipment placed so far
this year are already at a record $3 billion and will go
higher by year's end. Reports from Moscow, for example,
indicate that, during recent negotiations, Soviet buyers
have revised upward their original requests for US equip-
ment.
In recent weeks Moscow has also placed orders for
$900 million worth of corn and wheat and $200 million
worth of raw sugar. A second major sugar purchase, valued
at over $300 million, reportedly is being negotiated.
The Soviets will pay cash for most of their agri-
cultural purchases and for roughly $150 million in West-
ern equipment. Moscow probably would not have bought
such sizable amounts of grain, sugar, and beef products
if--as in the past--the purchases required heavy borrow-
ing. Soviet agricultural output promises to be good
this year, and recent purchases seem geared to improving,
rather than just maintaining, domestic conditions. The
$100-million cash purchase of tractors from International
Harvester, on the other hand, resulted from the Soviet
desire and ability to avoid the high interest rates pre-
vailing in the West.
The USSR should have little trouble in obtaining
the hard currency required to meet their contractual
obligations. The Soviets are expected to have substan-
tial trade surpluses in 1974 and in 1975 as a result of
the rapid rise in world market prices for their major
raw material exports.
Gold sales are another major source of hard cur-
rency. While only $300 million in Soviet gold is known
to have been sold this year, large additional sales are
rumored to have been made in late October. At current
prices, Soviet gold sales from current production alone
could exceed $1 billion this year and even more next
year.
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National Intelligence Bulletin November 9, 1974
AUSTRIA
Chancellor Bruno Kreisky will focus his discussions
with President Ford this Tuesday and Wednesday on economic
and energy problems and the emigration of Soviet Jews
through Austria.
Kreisky will solicit US views on Austria's expand-
ing trade relations with South Africa, South Korea, China,
and North Vietnam. Considerable trade is already con-
ducted by Austria's nationalized steel firms with South
Africa, and Kreisky reportedly will seek assurance that
the US will continue to block South Africa's expulsion
from the UN.
The Chancellor is also seeking US views on the im-
pact of several recent energy decisions on Austrian
neutrality. Austria joined the International Energy
Agency of the OECD yesterday, and has also arranged for
electrical power deliveries from Poland. Although Krei-
sky does not intend to raise the issue, he is prepared
to discuss Austria's recent natural gas deals with Al-
geria and the Soviet Union. He does intend, however, to
explore the establishment of an "institutionalized dia-
logue" between oil-producing and consuming countries
with the aim of keeping oil out of the Arab-Israeli con-
flict.
Kreisky is interested in learning more about the
US-Soviet agreement on the emigration of Soviet citizens.
The Austrians for several years have provided a transit
facility near Vienna for Soviet emigrees, mainly Jews,
at considerable cost and risk of Arab terrorist attack.
He may wish to discuss ways in which the burdens of
processing these emigrees can be shared by other West
European countries.
The Chancellor may also make a personal request
to President Ford for support of Austria's motion at
the UN to declare Vienna that organization's third head-
quarters city, in addition to New York and Geneva. The
Socialists in Vienna have pinned their prestige on a
billion-dollar development site along the Danube, in the
hope of attracting additional UN activities to the city.
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National Intelligence Bulletin November 9, 1974
JAPAN
The US embassy in Tokyo reports that the atmosphere
surrounding President Ford's visit--scheduled to begin
on November 18--is improving. There is no prevailing
mood against the trip, and opposition forces are trimming
their activities accordingly. One opposition party re-
cently decided against participating in a campaign against
the visit, and others are still unable to agree on a uni-
fied effort.
The major groups now opposing the visit--the Com-
munist and Socialist parties and Japan's largest labor
federation--are still committed to holding demonstrations,
but they are emphasizing their orderly, nonviolent char-
acter. In an effort to avoid a sense of confrontation,
their major rallies in Tokyo are scheduled for days the
President will not be there. The first will occur on
November 17, the day before his arrival; the second will
be on November 21, while he is in Kyoto.
The press has so far refrained from editorial com-
ment on the visit. The embassy has been told, however,
that editorials supporting the visit and reminding the
Japanese of obligatory good manners are'likely to appear
soon.
In short, the embassy sees a consensus developing
among political groups, the press, and the public at
large that a courteous reception is in order, and that
untoward incidents would harm Japan's image. The embassy
believes, therefore, that the visit will be a success,
despite the scheduled demonstrations and the possibility
that radical youth rou s may try to cause problems.
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National Intelligence Bulletin November 9, 1974
A speech yesterday by North Korean Foreign Minister
Ho Tam appears to signal some softening of Pyongyang's
views on the role of the US and the UN armistice commis-
sion in Korea.
Although he covers some well-worn ground, including
denunciations of the Pak government and President Ford's
coming trip to Seoul, much of Ho's speech is serious in
tone. Portions of the speech regarding the North's ne-
gotiating position may be used in the coming debate on
the Korean issue at the UN.
On the question of US troop withdrawals, Ho states
that the US "should not keep its troops in South Korea
indefinitely." This formulation is considerably softer
than Pyongyang's recent demands that the US leave "forth-
with" or at the "earliest possible date."
More important, Ho's discussion of security arrange-
ments that could replace the UN armistice commission is
more forthcoming and specific than anything seen in re-
cent North Korean statements. The foreign minister
states that, after US troop withdrawals, a bilateral
North-South commission could assume the "obligation to
fulfill the main provisions of the Korean armistice
agreement."
Ho Tam's speech may reflect a recognition by Pyong-
yang that it is not likely to succeed in any voting con-
frontation on the Korean question at the UN later this
month. It may indicate the North Koreans are willing to
be more flexible in reaching a settlement of the Korean
issue at the UN that would provide for some machinery
to replace the UN armistice commission. 25X1
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National Intelligence Bulletin
SOUTH VIETNAM
November 9, 1974
Saigon has called on the Communists to drop their
preconditions for resuming political and military dis-
oussions in a move to place the onus for the present lack
of movement in negotiations on Hanoi. There has as yet
been no Communist response to the offer.
The South Vietnamese initiative, which was announced
.by the Foreign Ministry yesterday, is, in effect, Saigon's
response to a Viet Cong statement of October 8 that called
for the removal of President Thieu before negotiations
could be resumed and the Paris Agreement implemented.
The timing of the South Vietnamese announcement
also appears connected with Thieu's current efforts to
counteract the-charges of his political opposition.
!hieu may hope that his negotiating initiative, together
with his recent cabinet shakeup and actions against cor-
ruption, will undercut efforts by the opposition in the
months ahead to attract wider political support.
Political talks between the two sides were suspended
by the South Vietnamese in April following the North Viet-
namese: capture of a ranger outpost north of Saigon. At
that time, the government sharply curtailed the privi-
loges of the Viet Cong and North Vietnamese military
delegations in Saigon, which in turn led to a Communist
walkout from the Saigon military talks. Military dis-
cuss.ons were resumed by the two sides in June, follow-
ing the government's restoration of privileges to the
Communist delegations, bu _~Ihey were quickly broken off
again by the Communists.
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National Intelligence Bulletin November 9, 1974
Leaders of the Social Democratic Center Party are
somewhat reassured by the provisional government's con-
demnation of leftists for their role in the recent pil-
laging of the party's headquarters.
The party has profited from the publicity generated
by the incident and subsequent government statements
condemning extremist actions. As the only declared con-
servative force in Portugal, the Social Democratic Center
had threatened to disband on grounds that an election
with only left-wing participants would be a sham.
In a meeting with Prime Minister Goncalves earlier
this,week? Goncalves agreed to grant party leaders prime
television time to explain the party's program and its
objectives. A lower ranking member of the government
promised that those responsible for sacking the head-
quarters would be arrested. Leaders of the Socialist,
Communist, and Popular Democratic parties also presented
short statements deploring violence.
Although party leaders are somewhat reassured by
the government's response, a number of unanswered ques-
tions remain. Several arrests have already been made,
but Goncalves has avoided the question of who will pay
the estimated $120,000 in damages.
There is considerable speculation about why the
Continental Operations Command, which is charged with
maintaining internal order, did not protect the Social
Democratic Center Party's property and whether this fail-
ure was deliberate. The government's sincerity about
fostering an atmosphere in which all parties will be
free to contest the election next March ill be tested
by the actions it takes in coming weeks. 25X1
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National Intelligence Bulletin November 9, 1974
NORWAY
The proposed national budget for 1975 represents a
significant change because substantial income tax reduc-
tions will result in the government's taking a lower share
of the gross national product. Of the total budget,
some 10 percent--or $797 million--is proposed for de-
fense, up 18 percent over last year in terms of dollars.
Because of increased wages and higher fuel costs, how-
ever, it will be an increase in real terms of only 1 per-
cent. This falls considerably short of an earlier pro-
jected military growth rate of 2.25 percent for the period
through 1978.
Approximately 15 percent of the defense budget is
directed at procurement, particularly air defense
materiel, ground force equipment, and ships. The budget
also provides for the continued study of new fighter
aircraft to replace the F-104, although actual replace-
ment will require additional funding. Similarly, the
budget allows for the purchase of the controversial
French Crotale low-altitude surface-to-air missile system.
A decision may come soon, but probably not until comple-
tion of the US evaluation of various all-weather, short-
range air defense systems, including the Crotale, in
January 1975.
Most of this year's increase is allocated to higher
wages and the increase in oil costs. Bleak military
service in the isolated north must compete with attrac-
tive job offers in the south. By raising salaries, the
Norwegians are seeking to reduce critical shortages of
skilled personnel in the armed forces. In a country
noted for full employment, the competition for skilled
personnel in the industrial sector, especially the
growing oil industry, has aggravated efforts to retain
skilled military specialists, such as aircraft crews,
ships' officers, and maintenance personnel.
Norway is following the trend of most European coun-
tries in that attention in fiscal matters now focuses on
domestic problems. Future defense budgets will permit
little more than the maintenance of current combat cap-
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National Intelligence Bulletin November 9, 1974
Repairs on Pakistan's Tarbela Dam are likely to be
made in time to irrigate the 1975-76 winter wheat crop.
Structural failures on the $1-billion project appeared
during the initial filling in August.
Tarbela water was originally expected to benefit
this year's crop, but the reservoir was drained in order
to save the threatened dam. Because of the loss of irri-
gation water, Pakistan will have to forego plans for in-
creased wheat production this year.
The dam itself, the world's largest earth-filled
dam with more than triple the mass of Egypt's Aswan,
withstood the emergency drainage without damage. Struc-
tural defects centered on the irrigation and hydroelec-
tric tunnels and their gates. The collapse of one tun-
nel caused the erosion of half a million cubic yards of
overlying fill.
Complete estimates of the cost of repairs will not
be available until the tunnels have been cleared for de-
tailed inspection, probably in about two weeks. Paki-
stan is seeking supplementary contributions and acceler-
ated payment of funds already pledged from the financers
of the project. The US is a major backer, and US engi-
neering firms have been involved in design work and as
general consultants. Lloyd's of London has insured the
project for $100 million, but a protracted settlement
of claims is likely.
The addition of Tarbela waters to the country's al-
ready extensive irrigation system will eventually make
the nation self-sufficient in foodgrain production.
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National Intelligence Bulletin
CYPRUS-UK-USSR
November 9, 1974
London and Moscow are both anxious to give aid to
the Greek Cypriot - controlled Cyprus Airways which would
enable it to continue operations. Since the Turkish
military has so far refused to reopen the Nicosia air-
port, Cyprus Airways has been left without a base of op-
erations and must develop alternative landing facilities.
Last month, Moscow offered to supply planes, cheap
fuel and lubricants, and other aid needed to establish
another international airport, perhaps at Larnaca. The
British, in an effort to undercut any Soviet-Cypriot
cooperation, have countered with an offer of aircraft.
British officials hope that because the Soviet YAK-40
aircraft is not certified for airworthiness in many
countries on Cyprus Airways' routes, the Greek Cypriots
will be forced to accept the larger, longer range
Viscounts. The Greek Cypriots would probably prefer
to accept the British offer for political reasons, but
they may continue to use Moscow's offer of aid to pres-
sure the British and the US to assist in opening the
Nicosia airport.
The lack of suitable air facilities would hamper
recovery of the Greek Cypriot economy and ensure another
bleak tourist season next spring. The Turkish Cypriots,
who plan a full-scale airport at Kyrenia, would be in
full control of the island's tourist trade.
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National Intelligence Bulletin November 9, 1974
The Soviets are probably trying to rapidly deploy
their newest short-range, low-altitude tactical surface-
to-air missile system. The SA-8 mobile SAM will pro-
vide further redundancy to an already comprehensive mis-
sile defense for field units and compound the problems
of neutralization.
The Soviets currently have three fully deployed
SAM systems designed to move with their combat divisions--
the SA-6, SA-7 (original and MOD-1), and SA-9. All sys-
tems are self-propelled, except for the SA-7 which is
man-transportable. Soviet divisions now have a SAM de-
fense from 50 to 30,000 feet in altitude.
The assessed characteristics of these systems,
SYSTEM
MAX RG
MIN ALT MAX ALT
SA-6
NM
(FT)
(FT)
30,000
Semiactive
SA- 7
2
50
10,000
homing
Infrared
SA-7
3
50
15,000
homing
Infrared
MOD-1
homing
150
20,000
Radar
15,000
Infrared
homing
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National Intelligence Bulletin November 9, 1974
USSR: The traditional parade in Red Square on No-
vemberYfeatured no new weaponry. The usual assortment
of armored vehicles, artillery, and missiles was shown,
including the two SS-11 canisters that were seen for the
first time last year. The hand-held SA-7 surface-to-air
missile was also displayed. This is the first time the
Soviets have shown this weapon publicly, although it has
been operational since 1967. It was used extensively in
Vietnam and is now in the inventory of many Warsaw Pact
and Third World forces. The new Soviet medium tank did
wing
not appear. A planned civilian march past the reviewing
stand was canceled because of inclement weather. I
Ethiopia: The Armed Forces Coordinating Committee
is attempting to end mutinies by two infantry battalions
in the Ogaden region of eastern Ethiopia. The mutinies
stem from grievances over pay, allowances, and living
conditions; one of the battalions wants to be transferred
out of the hot Ogaden lowlands.
Kawait-Banladesh: Kuwait is using some of its
large foreign exchange reserves to increase financial
assistance to South Asian countries. Last month, Kuwait
provided Bangladesh with a $20-million loan at 6 percent
interest to help ease Dacca's foreign exchange shortage;
a similar loan was recently made to Sri Lanka. Except
for Iraq, no other Arab state has provided significant
economic aid to Bangladesh, other than flood relief last
summer. Kuwait presumably would like to gain some credit
internationally for aiding an indigent Moslem country.
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