CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027400010036-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 21, 2016
• Document Release Date: February 1, 2008
• Sequence Number: 36
• Publication Date: February 13, 1975
• Content Type: REPORT

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Top Secret
Ilk
National Intelligence
Bulletin
State Dept. review completed
DIA review(s) completed.
Top Secret
February 13, 1975
N2 638
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National Intelligence Bulletin
February 13, 1975
CONTENTS
OPEC: Oil ministers to discuss the effect of the dollar's
decline on prices. (Page 1)
LIBYA: Oil prices lowered for a second time this year
in order to boost production. (Page 3)
TURKEY: Ankara warns it will renegotiate defense agree-
ments unless military deliveries, are resumed. (Page 4)
USSR-UK: Prime Minister Wilson arrives in USSR today.
(Page 6 )
PORTUGAL: Formation of "internal information" unit for
the army announced. (Page 7)
DENMARK: Social Democratic leader forms single-party,
minor ty government. (Page 8)
JAPAN: Virtually no chance of NPT ratification by cur-
rent Diet. (Page 9)
BOLIVIA-CHILE: Diplomatic relations restored; other
agreements under negotiation. (Page 10)
MALAGASY REPUBLIC: Army units reacting to assassination
o Ratsiman ravaa. (Page 12)
FOR THE RECORD: (Page 17)
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National Intelligence. Bulletin
February 13, 1975
In response to a Kuwaiti request, OPEC oil ministers
will discuss the dollar's recent decline in relation to
most other major currencies at their meeting in Vienna
next Wednesday. Despite their warnings that a continua-
tion of the dollar's downward trend might force OPEC to
raise oil prices or peg the price of oil to a basket of
other currencies, most OPEC members apparently continue
to support their decision in December to hold the line
on prices, at least through September.
Most oil contracts are denominated in either dollars
or sterling. The recent declines of both currencies have
reduced somewhat the value of OPEC revenues and foreign
reserve accumulations relative to the cost of imports
from countries whose currencies have appreciated relative
to the dollar. Less than 20 percent of OPEC's imports
are from the US.
One immediate consequence of the dollar's decline
was yesterday's decision by Iran to sever its currency's
relationship to the dollar and to peg it instead to the
International Monetary Fund's Special Drawing Right (SDR).
The value of the SDR is based on a weighted average of
the value of 16 major currencies. Tehran expects the
move to decrease somewhat the domestic cost of Iran's
imports and relieve inflationary pressures slightly.
Other oil producers with currencies pegged to the
dollar may be inclined to follow Tehran's example.
This includes the majority of OPEC members. A number
have complained in recent weeks about the gyrations of
the dollar and about the rising cost of foreign imports.
There is no indication, however, that Iran-will also
tie oil prices to SDRs as a hedge against a further down-
ward movement of the dollar. Despite their concerns over
the dollar's decline, it is unlikely that OPEC members
will decide to change their oil-pricing practices soon.
Some OPEC members, such as Saudi Arabia, view the dollar
as only temporarily depreciated and, hence, do not feel
compelled to protect the value of their receipts by
changing pricing practices.
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National Intelligence Bulletin
February 13, 1975
Venezuela, which trades heavily with the US and is
accordingly less affected by the dollar?s decline than
the Middle East producers, has indicated that there is a
strong determination among most OPEC members to hold the
line on prices until September. The Nigerians have
voiced similar views. Nevertheless, a further substan-
tial decline of the dollar could ultimately lead to an
adjustment of oil-pricing practices that would raise
the price of oil in terms of dollars.
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National Intelligence Bulletin
LIBYA
February 13, 1975
In an effort to boost production, Tripoli reportedly
has reduced prices for most of its crude oil--for the
second time this year. Average costs to the companies
will be lowered between 8 and 14 cents a barrel.
These price cuts follow recent price shaving by the
Libyan National Oil Company on oil from fields wholly
owned by the Libyan government. During the fourth quar-
ter last year, the Libyan company made direct sales at
50 cents a barrel below the price charged producing com-
panies who marketed its share in their joint output.
There is evidence that the Libyan National Oil Company
continued this practice even after reducing the prices
charged to the producing companies on January 1.
Tripoli's desire to boost foreign exchange receipts
is probably the main reason for pricing policy changes.
Libyan oil output declined from about 2 million barrels
a day in January 1974 to 900,000 barrels a day by the
end of the year because of noncompetitive prices. As a
result, foreign exchange earnings fell below the level
of foreign exchange expenditures late in the year.
Price shaving by the Libyan company apparently facili-
tated its increase in production from 80,000 barrels a
day in September to 140,000 barrels a day in November,
while output in jointly owned fields fell from 1,245,000
to 835,000 barrels a day. The new prices will be lowest
for low-gravity crude oil, much of which comes from
nationalized fields. Some industry analysts feel fur-
ther price reductions will be necessary to raise produc-
tion substantially.
The Libyan National Oil Company's price discounts
may also have been made to strengthen its marketing
facilities and to further bilateral economic relations.
Many of its sales are part of much larger economic
packages that include such 'things as joint investment
banks, capital investment projects, commodity trade
agreements, and arrangements for labor migration to
Libya.
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National Intelligence Bulletin
February 13, 1975
The Turkish government yesterday reiterated its
warning that all defense agreements with the US will be
subject to renegotiation unless military equipment deliv-
eries to Turkey are resumed.
Ankara has officially informed NATO of the problems
the US action will cause Turkey in carrying out its ob-
ligations to the alliance, and it has asked the Defense
Planning Committee to conduct an investigation into the
effects the "US arms embargo" will have on defense in the
eastern Mediterranean. Turkey's ambassador to NATO has
informed his US counterpart that he has been instructed
to consult with other allied governments on the apparent
application of the "embargo" to items purchased with NATO
infrastructure funds when a US manufacturer was the main
contractor. The Turks reportedly have reacted to this
situation by suspending payments to US contractors on
infrastructure projects in Turkey.
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National Intelligence Bulletin February 13, 1975
The Turkish Foreign Ministry has used the risk of
anti-American incidents to turn aside a US embassy re-
quest for visits by three US navy vessels to Turkish
ports. Although the Foreign Ministry's action was not
an outright rejection of the request on political grounds,
it was clearly a retaliatory move, with other such steps
likely to follow.
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National Intelligence Bulletin
February 13, 1975
British Prime Minister Wilson is scheduled to arrive
in the Soviet Union today for a five-day visit. The
meeting will be the first between Soviet and British
officials at this level since 1970.
London has trailed well behind the other major West-
ern nations in improving relations with the USSR, partly
because of the mass expulsion of Soviets accused of espi-
onage in 1971. Neither1side is indicating it expects
dramatic developments to come from this visit. Several
routine bilateral accords will probably be signed, but
a Soviet Foreign Ministry official has said that any
political documents emerging from the visit will be far
less important than those the USSR has signed with the
US, West Germany, and France. He added that an increase
in trade between the two countries would depend on "po-
litical developments," an apparent reference to the
Soviets' desire for British concessions on CSCE and MBFR
issues.
The British have tried to beat the Soviets at their
own game by submitting a large package of topics to be
discussed during the visit, including the draft of a
joint declaration on the nonproliferation of nuclear
weapons. The British expect that the Soviets will press
for their favored formulations on CSCE and MBFR issues,
and that these topics will be the main sticking points
in the talks. Recently--perhaps with the visit to Moscow
in mind--they have adopted a more conciliatory tone on
CSCE in Western councils. There is still, however, a
sizable gap between the Soviet and British positions.
British officials say they have hinted broadly that
a meeting between Wilson and Soviet General Secretary
Brezhnev would be desirable. The Soviets have made no
commitment, but they have unofficially leaked stories
that have kept the possibility alive.
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National Intelligence Bulletin
February 13, 1975
The Portuguese Armed Forces Movement's weekly bul-.
letin announced on Tuesday the formation of special "in-
ternal information and public relations teams" to
strengthen morale in the army and to explain the Move-
ment's policies to the troops. The announcement acknowl-
edges for the first time that the Movement does not com-
mand unanimous support in the military and admits the
army is "not easily accepting" the consequences of the
coup last April.
The announcement says these teams--composed of "or-
dinary soldiers and possibly civilians"--will be empowered
to interpret army directives and to accompany commanders
to regional army meetings. While it is still too early
to make any firm judgments on this development, it has
the earmarks of the establishment of a political commissar
sys tem.
Command-rank officers, in any case, will not appreci-
ate this type of interference and it is likely that the
order, if implemented, will widen the differences that
exist between some members of the Movement and the major-
ity of the armed forces.
It is also possible that a majority of the Movement's
members will not support this order. The responsibility
for the publication of the weekly bulletin has been in
the hands of more radical elements of the Movement, and
it is possible that on this occasion, they may have over-
stepped their authority.
Debate continues within the military, meanwhile,
over the future role of the Armed Forces Movement in
Portuguese politics. There are rumors that the Movement
will be reorganized to take a formal place in the govern-
ment.
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National Intelligence Bulletin
February 13, 1975
After weeks of negotiation, Social Democratic leader
Anker Jorgensen has succeeded in forming a single-party,
minority government.
Jorgensen, who was prime minister in 1972 and 1973,
tried earlier to form a majority government, but he
failed because of the fragmentation of the Danish polit-
ical scene and the deep-seated differences on economics
among the parties. His second chance came after outgoing
Prime Minister Poul Hartling's efforts to put together a
four-party, center-right minority coalition were blocked
at the last minute by maverick Progressive Party leader
Mogens Glistrup.
With only 53 of the 179 seats in Parliament, Jorgen-
sen will have to depend on the tacit support of the other
socialist parties and at least one non-socialist party.
The socialist parties will back Jorgensen on confidence
votes, but the support of the non-socialist parties will
depend on the issue under consideration.
The Jorgensen government will not have the solid
parliamentary support or the longevity to come to grips
with Denmark's critical economic problems. Jorgensen
may have to shelve his party's radical economic proposals
and adopt a watered down version of Hartling's plan in
order to survive.
The new government will not support US policies to
the degree that the Hartling government did. There may
be a slight shift to the left on foreign policy matters,
but there will not be a radical change in the US-Danish
relationship. Membership in NATO will remain the basis
of Danish security policy.
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National Intelligence Bulletin
February 13, 1975
There is virtually no prospect for Japanese ratifi-
cation of the nuclear non-proliferation treaty (NPT)
before the conference of ratifying states scheduled for
May. In the last few days, Prime Minister Miki and For-
eign Minister Miyazawa have publicly backed away from
previous commitments to push for ratification in the
current session of the Diet that ends in May.
The policy change was apparently made at a meeting
of ruling party officials last weekend at which right-
wing opponents of the treaty openly balked at the idea
of foreclosing Japan's nuclear weapons option. These
long-time opponents of NPT ratification probably made
their stand at this point because recent rapid progress
in Japanese negotiations with the International Atomic
Energy Agency in Vienna on a safeguards agreement has,
in effect, removed the major procedural obstacle to Diet
consideration of the issue. The right-wingers, and other
Japanese who oppose ratification, have long used the
safeguards issue as the main cover for their unwilling-
ness to support the NPT.
The Miki government, for its part, has clearly
chosen not to buck the intra-party opposition on the
issue; Miki is saving his political capital with the
right-wingers for what he sees as more important uses.
The proposed Japanese peace and friendship treaty with
China, for example, has a higher priority for the gov-
ernment, in part because of its greater domestic polit-
ical appeal.
Japan's failure to ratify the NPT during the cur-
rent Diet session will not necessarily foreclose posi-
tive action later. The bedrock opposition of the ruling
party's right wing, however, is unlikely to dissipate,
and ratification may not be pushed until proponents of
the treaty are on much stronger political ground.
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National Intelligence Bulletin
BOLIVIA-CHILE
February 13, 1975
Bolivian President Banzer has represented his meet-
ing with Chilean President Pinochet last week--which re-
sulted in the restoration of diplomatic relations--as a
step toward Bolivia's goal of gaining access to the sea.
The fact that neither government has publicized the sub-
stance of the talks suggests that details of additional
agreements are being negotiated. Representatives of the
two countries are scheduled to meet again later this
month to continue the talks.
Banzer has responded to domestic press accusations
of a diplomatic "sellout" by noting that he told Pinochet
that Bolivia wants full control over a coast and connect-
ing territory. He said, "We are willing to do anything.
If they want us to pay for what we need, I know that the
Bolivian people will make sacrifices."
It is unlikely that Pinochet has promised a major
concession, but he could well have agreed to some quid
pro quo economic exchange--perhaps involving Bolivian oil.
In any case, the improvement in relations has been greeted
favorably by the Chileans, who see it as a useful gain
in diplomatic maneuvers related to the fear of PPr?y;an
aggression.
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National Intelligence Bulletin February 13, 1975
MALAGASY REPUBLIC
Malagasy army units, reacting to the assassination
of the new chief of state, Ratsimandrava, yesterday
attacked the mobile police force camp in Tananarive that
had been a center of antigovernment activity in recent
weeks. Although many of the dissidents in the camp,re-
portedly surrendered last night, government forces re-
sumed the attack early today. A group of dissident army
officers had taken refuge in the police camp in early
January after failing in an effort to overthrow the gov-
ernment. No fighting elsewhere on the island has been
reported.
General Gilles Andriamahazo, head of the new 19-
member ruling military committee, has charged that mem-
bers of the mobile police force were responsible for the
slaying of Ratsimandrava.
In addition to Andriamahazo, the military committee
includes former foreign minister Ratsiraka, the military
and security officers who had recently been named to
Ratsimandrava's cabinet, and a number of junior officers.
All areas and tribal groups of Madagascar are represented
,
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Cambodia: Lower Mekong
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National Intelligence Bulletin
FOR THE RECORD
February 13, 1975
Cambodia: The situation along the Mekong--Phnom
Penh's vital supply link--took another turn for the worse
on Tuesday with the loss of the key position at Dei Doh.
This position was the last one near the northern choke-
point, some 25 miles south of the capital, and its fall
significantly reduces the government's chances of reopen-
ing the river in the near term. The loss of this govern-
ment stronghold forfeits the upper strategic narrows to
the Khmer Communists and leaves them'in virtual control
of all key terrain along the river corridor between Phnom
Penh and the South Vietnamese border.
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Top Secret
Top Secret
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