NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027800010032-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 24
• Document Creation Date: December 20, 2016
• Document Release Date: November 16, 2006
• Sequence Number: 32
• Publication Date: June 19, 1975
• Content Type: REPORT

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Top Secret
National Intelligence
Bulletin
DIA review(s) completed.
State Dept. review completed
Top Secret
THAI
une
N2 662
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National Intelligence Bulletin
June 19, 1975
JAPAN-CHINA: Peace treaty
talks dead for now . . . . . . . . . . . . . . . . . . . . 2
PORTUGAL: Troops used to
break up demonstrations . . . . . . . . . . . . . . . . . . . .
BRAZIL: Nuclear cooperation agreement
with Bonn leads to problems with the US . . . . . . . . . . . . . 6
CHILE: Terrorism renewed . . . . . . . . . . . . . . . . . . 7
EGYPT: Ship damaged in
Strait of Gubal . . . . . . . . . . . . . . . . . . . . . . . . 10
EC - ARAB STATES: Areas for possible
cooperation chosen at first meeting . . . . . . . . . . . . . . . 11
SPAIN: Measures to deal with Basque
terrorism under consideration . . . . . . . . . . . . . . . . . . 12
EC: France to rejoin float . . . . . . . . . . . . . . . . . . . 13
FRANCE: Union of the Left
Alliance meets today . . . . . . . . . . . . . . . . . . . . . 14
USSR: Soviets trying to eliminate delays
in their nuclear power program . . . . . . . . . . . . . . . . . 16
FOR THE RECORD . . . . . . . . . . . . . . . . . . . 17
ANNEX: Gandhi's Control
In India Impaired
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National Intelligence Bulletin June 19, 1975
The Japanese Foreign Office has conceded that peace treaty talks with Peking
are dead for now.
The inability of the two governments to agree on the handling of an
anti-hegemony clause--one with anti-Soviet overtones-proved to be the stumbling
block. According to a Japanese Foreign Ministry official, Tokyo finally offered to
include the hegemony clause in the preamble, rather than in the body of the treaty,
thereby giving Peking "80 percent" of what it wanted.
The Japanese Foreign Office believes that relations with Peking will not be
seriously harmed by failure to conclude the pact, as long as the issue is allowed to
subside quietly. Tokyo will also stress other more positive developments in bilateral
relations-progress on a fisheries agreement and trade, among other things-in an
effort to offset the breakdown in talks.
Japanese officials believe that China's harder line may have resulted from
domestic political difficulties in Peking, although there is no solid evidence to
support this. Uncertainty regarding Prime Minister Miki's political staying power
may also have been a factor in China's unwillingness to compromise. If so, the
Chinese may seek to revive the talks after Miki ,is replaced-or once they conclude
that they will have to deal with him for some time to come.
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National Intelligence Bulletin
June 19, 1975
Tension rose a few more degrees in Portugal yesterday, as troops were used to
break up two demonstrations; scores of people were injured in one. The level of
violence, the need to use troops, and the continuing trouble over the Socialist
newspaper Republica will strengthen the argument of radical military officers who
want to abolish political parties and close down the Constituent Assembly.
These officers have apparently been stalemated in discussions of these matters
by the Revolutionary Council, which has now been meeting in secret for six straight
days.
Last night, troops fired into the air to disperse some 2,000 supporters of the
leftist workers who, earlier this month, took over the Catholic-owned radio station.
The demonstrators attacked supporters of Catholic control of the radio station with
stones, iron bars, and sticks, and trapped them inside the headquarters of the
Portuguese Catholic Church.
Portuguese catholic bishops had earlier issued a statement demanding the
re-opening of the radio station and criticizing the Armed Forces Movement for
"creating a climate of personal insecurity, intimidation, and anxiety about the
future."
Earlier in the day, troops dispersed a crowd of angry Socialists who had tried
to storm the offices of their newspaper; security forces had allowed Communist
printers to enter the building before Socialist editors arrived. The offices of
Republica re-opened briefly Monday, for the first time in a month, were closed again
Tuesday. Republica's editor was finally allowed to enter the building yesterday, and
he began negotiations with the Communist printers. At the end of the workday, the
printers surrendered the building to security forces, who said Republica would
reopen this morning.
The Socialists have not explicitly repeated their threat to resign from the
government if the newspaper is not returned to them, perhaps because they now fear
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National Intelligence Bulletin
June 19, 1975
the military will call their bluff. Socialist leader Mario Soares did say in an interview
last night that the Republica affair had reached an "impasse that might lead to a
serious political crisis." Soares expressed solidarity with the Catholic Church in its
struggle to retain contol of il:s radio station.
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National Intelligence Bulletin June 19, 1975
Brasilia's intention to conclude a nuclear cooperation agreement with West
Germany has led to new frictions in the country's usually friendly relations with the
US. The Brazilian press has, strongly denounced what it regards as US efforts to
prevent the signing of the agreement next ' week. Even after the agreement is
concluded, the issue will probably continue to be an irritant because related contract
negotiations are expected to drag on for the next several years.
Since 1967, Brazil has refused to sign the Nuclear Non-Proliferation Treaty on
the ground that the treaty is ineffective and freezes current power relationships. The
intransigence of Brazilian officials on this issue stems not only from apprehension
over the lead of neighboring Argentina in nuclear technology, but from a conviction
that Brazil, as an emerging world power, should not restrict it options.
Brazil also sees nuclear energy as an important factor in supplying its future
energy requirements. It imports three fourths of its oil, its known petroleum
resources are small, ,and demand for energy is growing. Although Brazil's uranium
reserves are modest, extensive exploration efforts are under way. Brazilian deposits
of thorium--which can be converted in reactors to form a new fissionable fuel,
Uranium 233--are second only to India's.
Brasilia has made it clear that it will not be deterred from signing the
agreement. When Foreign Minister Silveira assumed office last year, he said Brazil
would not automatically align itself with US foreign policy and expressed his belief
that it would acquire more influence internationally if it could demonstrate its
independence on major political and economic issues.
West German officials also are unhappy about US expressions of concern about
the projected sale of a full nuclear fuel cycle. They have not only taken precautions
to ensure that Brazil will comply with the safeguard procedures of the International
Atomic Energy Agency, but have also agreed to satisfy some, if not all, of the major
concerns voiced by four US experts who visited Bonn last May.
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June 19, 1975
Several separate incidents, one attributed to the guerrilla Movement of the
Revolutionary Left, which has been inactive since 1973, have raised government
concern that terrorism may increase. The Movement, which once claimed 2,000
activists, was largely neutralized by the government late last year.
An army officer who had been investigating arms smuggling was found dead in
Talca Province on June 5. Fourteen persons, subsequently linked to the Movement
by Chilean authorities, were arrested and implicated in his death. Soon after the
killing, reports appeared in the Chilean press that 15 Movement members had
infiltrated from Argentina. In a possibly related development, 17 persons were
arrested in northern Chile for distributing anti-government pamphlets.
The government's reaction to these incidents apparently is designed to warn
Chileans that a terrorist threat still exists and to give the appearance that the
Movement is under close surveillance. Stricter security measures may now be taken
in the political sector. There may also be a tightening of the limits of dissent over
the economy, particularly after former president Frei's public criticism of the
Pinochet aovernment's economic recovery oro4ram last week.
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National Intelligence Bulletin
June 19, 1975
A Panamanian merchant ship reportedly struck an explosive device on June 16
in an area of the Strait of Gubal that presumably had been cleared by Soviet
minesweepers last year. This area was mined by the Egyptians in 1969 and 1973.
No casualties have been reported, and the 12,700-ton cargo ship is proceeding
under its own power. This incident not only embarrasses the Soviets, but could also
cause an increase in insurance rates for ships transiting the Suez Canal, thereby
inhibiting greater commercial use of the waterway.
There is some question whether the USSR certified the Strait of Gubal as safe
for navigation. The Soviet defense attache in Cairo reportedly stated that the Soviets
certified the Strait as being clear of mines after they completed their minesweeping
operation. The Soviets, however, are currently embroiled in a dispute with the
Egyptians over whether Moscow actually did so. In any event, the Soviet operation
was often interrupted by inclement weather and Israeli harassment of ships that
strayed into its claimed waters off the Sinai coast. These gaps could have permitted
some mines to drift into areas already cleared.
It is also possible that the Egyptians did not accurately mark their minefields.
Consequently, the Soviets could not be assured of the location of all mines that
might drift into the shipping lanes. A notice was issued to mariners on June 11
warning merchantmen that the Strait of Gubal and certain other previously mined
areas were possible hazards to navigation.
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National Intelligence Bulletin
June 19, 1975
The first meeting between EC and Arab experts in Cairo last week was an
apparent success. The experts agreed on several areas for possible future
cooperation. They skirted the three troublesome topics of oil, Israel, and the
Palestinians, which have delayed commencement of the talks, originally proposed by
the French 18 months ago. A second meeting is planned for late July, probably in
Italy, and is to be similarly structured to deny specific representation to the
Palestine Liberation Organization.
The participants in the Cairo meeting proposed six areas for future economic
cooperation: industrialization; basic infrastructure; agricultural and rural
development; financial cooperation; trade; and cooperation in the scientific,
technological, cultural, labor, and social areas.
The listing of labor and trade as areas for cooperation was a concession by the
EC, but the Community refused Arab demands that would establish the principle of
identical EC trade treatment for all Arab states. The EC also rejected Arab demands
that would have guaranteed training and equitable treatment for Arab workers in
Europe. Both topics are important in the negotiations of specific Community
agreements with some individual Arab states, now also under way, and the EC does
not want to generalize the benefits given to one state.
The major Arab concession, in addition to the format of the meeting, was the
omission from the final confidential joint memorandum of any reference to
guarantees for Arab investments in Europe.
The Irish chairman of the EC side said the Arab League and the Palestinians
present on the Arab side were particularly anxious to reach agreement on extending
cooperation. Representatives of the oil-exporting states seemed somewhat
indifferent, and the Algerians were negative "as usual." The British embassy in Cairo
commented that the EC chairman's inclusion of a reference in the joint
memorandum to "a common cultural heritage" of Europeans and Arabs had so
leased the Arabs that it made - -ch i evement of other objectives easier.
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National Intelligence Bulletin June 19, 1975
SPAIN
The Arias government reportedly is considering political measures to deal with
the troubled situation in the northern Basque provinces, where violence has now
spilled over into neighboring France.
Last week, the civil governor of Guipuzcoa Province announced the
government is considering revocation of the 1937 decree that denied to Guipuzcoa
and Vizcaya provinces special economic privileges that are still allowed in the other
Basque provinces. Acting on another long-held Basque grievance, Madrid announced
last month that it would allow instruction in the Basque, Catalan, and Galician
languages in those regions. These moves indicate that Madrid is beginning to view the
unrest in the Basque provinces as a political problem rather than just a security
matter.
Tension is still high in the Basque areas, although the general strike and
demonstration called last week to protest police repression failed to attract the
turnout its organizers had hoped for. Less than 15,000 workers appear to have
heeded the strike call, a small turnout compared with the 200,000 who walked off
their jobs last December in a similar protest. The modest turnout, however, is not an
accurate reflection of the deep resentment felt by the Basques over the continuing
police controls imposed by Madrid and the impending court-martial of two Basques
accused of the death of .a Civil Guardsman in 1974.
Meanwhile, a series of bombings and other actions by Spaniards against Basque
terrorists and sympathizers in France have provoked French government reaction.
The French government reacted to the recent incidents by declaring that Spain
had been requested to take measures to prevent a recurrence. In addition, orders
have been issued for stricter vigilance on the border and the expulsion of Basque
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National Intelligence Bulletin June 19, 1975
refugees sentenced for using false documents or possessing arms or explosives. A
French government spokesman lamented the fact that some Spanish exiles have
taken refuge in France for the purpose of planning violence against Spain.
Madrid has long resented the French policy of permitting Basque terrorists to
use France as a sanctuary. While the cross-border actions may have temporarily
irritated French-Spanish relations, they appear to have had the desired effect of
n France to restrict the terrorists' freedom of movement.
EC
French Finance Minister Fourcade announced Tuesday that on July 10 the
franc will rejoin the six currencies now in the European joint float. The franc's
return after a year and a half of free floating brings a second major currency to the
band, which has been dominated by the German mark. After the franc's reentry,
only the pound and the lira among EC currencies will be floating freely.
The European joint float was originally designed as a first step toward the EC's
planned economic and monetary union and, in particular, to limit the fluctuations
between the currencies of countries that trade together extensively. Under the joint
float agreement, fluctuations among participating currencies are limited to a
maximum of 2.25 percent in either direction.
The pound and lira were withdrawn from the float when downward pressure on
the currencies made intervention unacceptably expensive. The franc was pulled out
in early 1974 during the height of the energy crunch, because of Paris' concern with
protecting its foreign exchange reserves.
EC heads of government, attending their second meeting as the European
Council on July 17, will be able to point to the newly expanded float as a step
toward the long-term goal of economic and monetary union. The fact that Britain
and Italy will remain outside the float-and that there is no prospect for their joining
any time soon-may, however, give rise to concern that the EC is moving in the
direction of a "two-tier" community, divided between those able to move more
quickly toward integration and those with weaker economies for whom certain
"allowances" must be made.
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National Intelligence Bulletin June 19, 1975
Leaders of the French Union of the Left Alliance-Communists, Socialists, and
the Left Radicals-meet today for their first formal summit-level conference in more
than a year. The parties disagree over several important issues that are likely to be
discussed. A common desire to preserve the alliance, however, seems likely to
produce a superficial statement of accord and an agreement to establish working
groups to review conflicting positions.
The meeting was agreed to last month when tensions between the Socialists and
Communists appeared to have eased following Socialist leader Francois Mitterrand's
visit to Moscow in late April. Early this month, however, the closure of the Socialist
newspaper Republica in Lisbon sparked a renewed dispute between the parties over
the touchy issues of freedom of the press and Communist attitudes toward
pluralism.
The Republica affair, which continues to divide Portuguese Communists and
Socialists, seems certain to bedevil today's meeting. French Communists strongly
support the Portuguese Communists, while French Socialists still back their sister
party in Lisbon.
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National Intelligence Bulletin
June 19, 1975
The Soviets are taking steps to eliminate the causes for delays in their nuclear
power program, partly through a reorganization of ministries and partly through
attempts to acquire needed facilities from the West.
The Presidium of the Supreme Soviet recently separated Power Machine
Building from the former Ministry of Heavy Power and Transport Machine Building
and made it a separate ministry, presumably to give much-needed impetus to the
trouble-plagued nuclear industry. The Soviet nuclear power program has consistently
fallen behind schedule, in large part because of delays in the delivery of large,
components. The creation of the new ministry just before the start of the 10th Five
Year Plan probably indicates the Soviets will give Power Machine Building a
significant share of the funding, manpower, and material resources allocated under
the plan.
Part of this funding may go toward purchasing nuclear component
manufacturing facilities from i.,he West. In the past few months, Soviet delegations to
France and the US' have requested bids on such facilities, as well as on the purchase
of pressurized water reactors. The Soviets appeared willing to begin negotiations on
these matters in the near future, with funding to be provided under the Five Year
Plan.
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National Intelligence Bulletin June 19, 1975
Gandhi's Control In India Impaired
Prime Minister Indira Gandhi's political
position has been seriously weakened by the two
setbacks she suffered last week: her conviction
by a court in her home state for campaign
violations in 1971; and the defeat of her
Congress Party in the legislative election in the
state of Gujarat.
Her survival in office now depends on the
Supreme Court's verdict on the appeal she
reportedly will file on Friday and on her ability
to fend off challenges from within the troubled
Congress Party. Even if the Supreme Court
decides in Mrs. Gandhi's favor, her control over
both the party and the government will be
impaired. Still, the centrist Congress
Party-India's only truly national party-is likely
to continue as the dominant factor in Indian
politics.
A Surprise Ruling
The ruling by the court against Mrs. Gandhi
caught most Indians by surprise; the case had
been in and out of state courts since the charges
were brought against her four years ago. The
almost simultaneous election setback in Gujarat
was a major blow to the party and strongly
implies that Mrs. Gandhi, who campaigned
vigorously in the state, is not the vote-getter she
was in 1971 and 1972.
Prime Minister Gandhi addresses Opposition parties lost no time in
rally in New Delhi demanding Mrs. Gandhi's resignation. She has
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National Intelligence Bulletin
not responded unequivocally, but gives every
evidence of a determination to stay on. She has
canceled official visits to Mexico and Cuba this
month.
A decision by the Supreme Court could be
months away. In the interim, she will have
problems keeping her Congress Party in line. The
defeat in Gujarat heightened already growing
concern among party leaders about the party's
ability to keep its large parliamentary majority
in the next national election, which must be
held no later than next spring. Some party
leaders are convinced that public resentment will
grow if Mrs. Gandhi remains in office should
there be a drawn-out appeal to the Supreme
Court.
The violations of which Mrs. Gandhi was
found guilty involved the use of government
officials for campaign purposes. A loose
coalition of generally conservative opposition
parties was formed last year in an effort to
capitalize on popular dissatisfaction with
Congress' performance. Led by Jayaprakash
Narayan, a 72-year-old disciple of Mahatma
Gandhi, the coalition has been loudly
demanding clean government, election reforms,
and lower prices. It has accused Mrs. Gandhi of
dictatorial actions, such as suspending civil
liberties and using police and paramilitary forces
to suppress legitimate dissent.
June 19, 1975
The Gujarat election was the first major Opposition coalition leader
test of the ability of the members of the Jayaprakash Narayan
opposition coalition to unite behind single candidates. The opposition held together
in the campaign and formed a government on Wednesday. For more than 20 years,
Congress had been able to count on a split of the opposition vote at both the state
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and national levels. The Gujarat victory will stimulate the coalition to cooperate on
a nationwide basis in preparation for the next national election.
Pressures to Resign
After the state court decision last week, the opposition coalition declared that
it no longer recognized Mrs, Gandhi as prime, minister. The opposition is clearly
going to try hard to force her early resignation.
--Sit-ins have begun in New Delhi and a mass protest march in the capital is
scheduled for Sunday. Government security forces can maintain public order,
but injuries and arrests may result in renewed accusations of police repression.
--The opposition's small contingent in parliament plans to obstruct proceedings
when parliament reconvenes, possibly in mid-July. It has already challenged
Mrs. Gandhi's right to take part in parliamentary debates before her case is
decided. She could delay convening parliament until November.
Mrs. Gandhi's cabinet associates have responded with public expressions of full
confidence. Congress Party members of parliament reaffirmed their support at a
meeting on Wednesday. Behind the scenes, however, party leaders are carefully
assessing whether she ought 1:o resign. They probably will not make a decision until
the Supreme Court responds to her appeal.
The Prime Minister, of course, hopes the Supreme Court will extend the stay
granted by the state court without setting conditions that would prohibit her from
participating in parliamentary sessions. If it does not, she may have to step aside in
favor of an interim prime minister pending a final ruling. Likely contenders for that
role include three veteran cabinet members, all in their sixties: Agriculture Minister
Jagjivan Ram; Foreign Minister Y. B. Chavan; and Defense Minister Swaran Singh.
Also in the running would be Congress Party President D. K. Barooah and West
Bengal Chief Minister S.. S. Rey.
Mrs. Gandhi would not wish the job to go, even on an interim basis, to either
Ram or Chavan. Both are ambitious and might prove reluctant to give the job back
to her. She would be especially reluctant to have Ram take over. He has a sizable
following in the party, particularly among those who sympathize with Naravan's
reform movement and are unhappy about Congress' loose alliance with the
Communists. Ram reportedly has said he would not feel bound to continue backing
Mrs. Gandhi if she steps aside.
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Stepping Aside
Mrs. Gandhi may still conclude that stepping aside would be politically wise.
Such a move would undermine some of the opposition's arguments and, perhaps,
win public sympathy for an embattled Prime Minister, still India's most popular
politician.
The Supreme Court's decision on her stay request and its willingness to speed
the appeal process will be important. The judge who is presiding while the rest of the
court is on vacation reportedly is pro-Congress. The chief justice, named by Mrs.
Gandhi over three senior judges, could assist her by calling a special session before
the court is due to reconvene in mid-July. Observers in India expect that the
Supreme Court will accord her tender treatment. She appointed all of the judges
now sitting on the court.
An alternative available to Mrs. Gandhi is to request the election commissioner
to waive the penalty imposed by her conviction-a six-year ban on holding public
office. Such a move, however, would infuriate the opposition and probably be
damaging at the polls.
The Foreign Bogeyman
Mrs. Gandhi has generally refrained from blaming her current troubles on
foreigners, as she has often done during times of stress. Her remark that Pakistan was
the only country made happy by recent developments was swiftly rebutted by Prime
Minister Bhutto. Bhutto, in fact, is concerned that as Mrs. Gandhi's domestic
position is threatened, she may shift to a tougher posture toward Pakistan. He
reportedly has ordered the Pakistani press not to gloat about Mrs. Gandhi's
predicament.
India's pro-Moscow Communists are fighting hard for Mrs. Gandhi. They are
worried that a change in prime ministers might alter the country's socialist policies
and close ties with the USSR.
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Top Secret
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