NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027800010020-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 20
• Publication Date: June 12, 1975
• Content Type: REPORT

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Top Secret
Offlux-m-
National Intelligence
Bulletin
DIA review(s) completed.
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National Intelligence Bulletin
June 12, 1975
CONTENTS
CHILE: Pinochet's economic
policy criticized . . . . . . . . . . . . . . . . . . . . . . . 6
JAPAN: Economic slump prompting
stronger government measures . . . . . . . . . . . . . . . . . 8
ANNEX: Angolan Nationalist Groups
May Be Edging Toward Civil War
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National Intelligence Bulletin
June 12, 1975
Former president Eduardo Frei's attack on the Pinochet government's
economic policy has generated shal?p rebuttals from at least one junta member and
the minister of economy.
Frei, in an article published on May 28, said the government's policy is no
remedy for Chile's serious economic problems and that the government must
intervene in the market while attempting to secure sizable amounts of foreign
assistance. Frei, a respected statesman and spokesman for the Chilean Christian
Democratic Party, may have criticized the government's economic program publicly
to let the Chilean public know that his party is still concerned with the country's
well-being.
President Pinochet chose not to respond personally to Frei's criticism, which
suggests that more dissent of this type will be allowed in the future.
In a speech on May .30, however, air force commander in chief and junta
member General Gustavo Leigh castigated Frei-although not by name-for failing to
offer a constructive alternative to Chile's economic problems. A day later, Minister
of Economy Sergio de Castro declared that the policies of the Frei administration
had precipitated the current economic problems by causing income distortions, high
inflation, and low growth rates. De Castro also blamed Frei for failing to give the
Pinochet administration's employment program credit for reducing the country's
jobless rate.
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National Intelligence Bulletin
June 12, 1975
The long economic slump in Japan has finally prompted Tokyo to take
stronger remedial measures. Even so, real gross national product is continuing its
downward slide.
In the first quarter of this year, government spending on public works went up
7 to 9 percent in real terms over the preceding three months. This is in sharp
contrast to what government officials have been saying for public consumption.
They have been taking the line that they have, done and expect to do little to
stimulate the economy for fear of generating further inflationary pressures. Credit
policy has also been eased again; last week, the discount rate was cut to 8 percent.
First-quarter consumer spending rose 2.9 percent in real terms over the
preceding period-the biggest jump since the slump began in late 1973. There has
been a steady rise in real incomes since late last year, leading to a rise in consumer
spending and a drop in savings rates. As a result, inventory liquidation has proceeded
rapidly. The strong showing in the government and consumer sectors held the drop
in real gross national product to 0.7 percent for the quarter.
There are still serious weak spots in the economy. Private capital spending
remains slack, dropping slightly in the first quarter compared with the preceding
period. Housing was down 9.6 percent from the fourth quarter in 1974, negating the
impact of the increase in government spending. Export performance also remains
weak, although offset by are even larger decline in imports. The inflation rate, as
reflected in the consumer price index, had been slowing, but now appears to have
leveled off. New price increases are possible in the month ahead as earlier cost
increases are passed on to consumers.
Tokyo still considers inflation control its number-one priority and hopes to
hold inflation below a 10-percent annual rate by next spring. This is unlikely,
however, if Tokyo continues to stimulate the economy at the current pace. Another
set of spending measures is to be announced later this month. The new programs
reportedly will involve more government spending, as well as lending aimed at
boosting housing construction.
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CONGO
f -_ Brasza,
CABINDA'R
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ANGOLA
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RHODESIA
W .K.)
TANZANIA
Bac es. SaRaain;.
MOZAMIiIQUE
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National Intelligence Bulletin June 12, 1975
Angolan Nationalist Groups
May be Edging Toward Civil War
The Popular Movement for the Liberation of Angola and the National Front
for the Liberation of Angola, the principal nationalist groups in the transitional
government, may be edging Angola toward civil war.
The two groups have clashed repeatedly during the past two months in
northern Angola, as well as in Luanda and Cabinda. The Popular Movement appears
determined to establish military superiority over its long-standing rival. Last week,
the Popular Movement also attacked units in Luanda of the smaller National Union
for the Total Independence of Angola. The National Union, which has tried to
remain aloof, fought back.
None of the three has the supplies or the mobility to wage a sustained military
campaign, but the two larger groups appear to be preparing for that eventuality.
The rivalry between the Popular Movement and the National Front dates back
to the late 1950s, the early years of Angolan nationalism. Throughout the
insurgency against Portugal, which began in 1961, the two groups fought each other
almost as much as they did the Portuguese. In the early years, the National Front
was dominant and was favored by the Organization of African Unity. By the late
1960s, however, it was overshadowed by the Popular Movement, which was able to
swing most African states behind its cause. It also received a steady stream of
military supplies from the USSR.
The transitional government installed last January has encouraged more
competition than cooperation. It was constructed on a system of checks and
balances in which members of one liberation group find themselves working, as
government officials, with subordinates from the other groups. The integrated
political, military, and police organizations of the transitional government have
failed to maintain order because of the conflicting interests of the three participating
groups.
Portuguese officials are not very effective because they are caught in the
middle. Portugal still has about 24,000 troops in the territory, but most of them are
stationed in and around Luanda. All of them are anxious to go home and would
probably be unwilling to get involved in prolonged fighting.
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National Intelligence Bulletin
June 12, 1975
ANGOLAN NATIONALIST GROUPS
Group-,, Leader S#re~ingth Backers Comment
Popular Movement for Agostinho Nato 8-10,000 in Angola proper;
the Liberation of Angola 2-3,000 in Cabinda
(MPLA)
'National front for Libera- Holden Roberto '840,000 in Angola proper;
tion of Angola (ONLA) approximately same num
=
herin training in Zaire;
2-300 in Cabinda
National Union for the Jonas Savimbi 3,000 in Angola proper;
Total Independence of 3-4,000 undergoing train-
Angola (UNITA) ing, 200 in Cabinda,
USSR, Congo Strong Marxist orientation;
'Nato well-known
throughout third world.
Zaire, China Pre-Western; poorly defined
political philosophy.
No major
hackers;
seeking
support
Pro-Western; moderate,
largely inactive and little
known. outside Angola
during the anti-Portuguese
insurgency.
Separate Armies
A major problem is that the independence agreement allows each of the three
to maintain a separate army. Each group is required to contribute to an integrated
national army, but all have shirked this commitment, steadily building up their own
military forces, particularly in the northern half of the territory and in and around
Luanda. The country is dotted with garrisons of the three groups living in uneasy
co-existence.
The National Front'and the Popular Movement.draw the bulk of their tribal
support from northern Angola and maintain their heaviest concentration of troops
there. The two groups have established important bases in that area and dominate
major supply routes to Luanda. The National Front has gained control of the port of
Ambrizete, in northwestern Angola, partially relieving it of its dependence on Zaire.
Fighting in northern Angola on May 28 was started by a Popular Movement
drive to disrupt the Front's supply routes and to force the National Front out of
areas where the Movement's tribal supporters predominate. The Movement
apparently suspected that a similar operation was launched by the National Front.
Reliable figures on the troop strengths of the respective groups are difficult to
obtain. The groups inflate or deflate their own figures according to political
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National Intelligence Bulletin
June 12, 1975
It would appear, however, that each of the two major groups has about 8,000
to 10,000 troops in Angola, the bulk of which are in northern Angola. The third
nationalist group, the National Union, has about 3,000 troops and apparently is
having no difficulty recruiting more. The Popular Movement apparently has about
2,000 troops in Cabinda, where it has long been active. The other two groups have
much smaller forces there.
The National Front may have an additional 10,000 troops in Zaire
In Luanda, the Popular Movement has demonstrated that it can quickly
mobilize large groups of well-armed irregulars, giving it a distinct advantage in the
capital city. In recent months, the Popular Movement has been receiving more
military supplies from the Soviets.
Zairian President Mobutu, whose own country suffered years of civil war, is
particularly sensitive to the prospect of similar turmoil in Angola. Both Zaire and
Zambia, moreover, rely heavily on rail and port facilities in Angola to ship their
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