NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A028500010004-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Document Release Date: June 30, 2005
• Sequence Number: 4
• Publication Date: January 3, 1976
• Content Type: REPORT

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Top Secret
swim w- MI
National Intelligence
Bulletin
DIA review(s) completed.
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January 3, 1976
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National Intelligence Bulletin
January 3, 1976
CONTENTS
ITALY: Government's viability may
hinge on economic debate in parliament . . . . . . . . . . . . . 4
INDIA: Foreign scapegoats
again useful to Gandhi . . . . . . . . . . . . . . . . . . . . 6
ZAIRE: Foreign investors may buy
back into nationalized businesses . . . . . . . . . . . . . . . . 8
CHILE: Further developments
in Pinochet-Frei confrontation .. . . . . . . . . . . . . . . . . 9
FOR THE RECORD . . . . . . . . . . . . . . . . . . . . . 10
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National Intelligence Bulletin January 3, 1976
Italian Prime Minister Moro's government will probably make a major effort to
placate the Socialist Party during the parliamentary debate that began yesterday on
portions of a new economic plan. Socialist leader De Martino earlier this week cited
the government's failure to consult the Socialists adequately on the economic plan
as a major reason for his threat to withdraw Socialist parliamentary support from
Moro's coalition.
The portion of the plan submitted to parliament yesterday consists of the
government's proposals for industrial restructuring and conversion. The government
proposes to:
--earmark about $9.3 billion for industrial restructuring, conversion, and
development;
--establish an ini.erministerial planning commission to direct the fund;
--provide expanded compensation for workers who lose their jobs or are laid off
as a result of industrial restructuring.
The Socialists are concerned that support for the bill as it stands would put
them out of step with their supporters in organized labor. Most of organized labor is
sharply critical of the government's proposals. These labor organizations maintain
that certain proposals give businesses a "license to fire." They also claim that there
are no provisions for maintaining jobs in restructured industries or for creating new
jobs.
All of this has made it increasingly difficult for De Martino to maintain control
of his badly divided party as it prepares for a national congress in February. His
rivals within the party are scoring points by arguing that the Socialists gain nothing
politically by continuing to support Moro.
Earlier, De Martino had been inclined to avoid challenging Moro until after the
congress. He is not likely to return to that position unless some concessions are
made to the Socialists-on the economic plan or some other issue-before the
Socialist directorate meets next Wednesday. The directorate is slated to make a final
decision on whether to end Socialist support.
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National Intelligence Bulletin
January 3, 1976
Some such concessions may have been foreshadowed by the conciliatory tone
Moro's Christian Democrats adopted in their initial comments urging De Martino to
abandon his threat. The Communist press is also arguing that now is not the time for
a change of government.
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National Intelligence Bulletin
January 3, 1976
Prime Minister Gandhi's recent charges that Western nations, particularly the
US, have interfered in the internal affairs of India reflect her long-standing personal
bias as well as her frequent use of foreign scapegoats when trying to justify
controversial political moves at home.
It is too early to tell whether the Prime Minister's blasts mean that, as far as she
is concerned, the period of slowly improving relations between New Delhi and
Washington is over. Relations had begun to improve in 1974. Her statements,
delivered at a just-concluded national conference of her Congress Party, were largely
extemporaneous and may have been influenced in part by the responsiveness of her
audience to such rhetoric.
Gandhi used the meeting to obtain party approval for an indefinite extension
of the state of emergency that she imposed six months ago and for a one-year,
postponement of national elections. She also revealed her intention to seek
constitutional revisions-expected to be introduced in the parliamentary session
beginning on Monday-that will probably make permanent the powers she now
exercises on an emergency basis.
There appears to be little opposition within the Congress Party to these moves,
but Gandhi remains highly sensitive to criticism, particularly from the West, about
her authoritarian rule. Her attacks probably were also aimed at appeasing leftists in
the Congress Party and the pro-Moscow Communist Party of India, which supports
her party. Indian leftists, and probably the USSR, are displeased over what is widely
seen as a "lurch to the right" in New Delhi since the emergency was imposed.
A trend to the right is reflected in the increasing prominence of Gandhi's son
Sanjay, in the less radical leadership of the Congress Party's youth wing, in the
choice of new central cabinet members, and in the government's focus on pragmatic
rather than ideologically based economic policies. At the conference, Gandhi
emphatically denied there had been a "lurch" and reaffirmed her government's
commitment to socialist goals.
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National Intelligence Bulletin
January 3, 1976
Effective January 2, Zaire is allowing foreign investors to buy back into
nationalized businesses they once owned-up to a limit of 40 percent. The
government will share with private Zairian citizens, on a selective basis, the
60-percent equity it is retaining in these enterprises. Zaire also will return all
nationalized property of long-term foreign residents 60 years of age or older.
Kinshasa has listed 83 firms immediately eligible for the program, including
Mobil, Texaco, Shell, and a number of construction and agricultural enterprises.
More firms probably will be added later. The petroleum sector was nationalized in
1974, and most other large businesses have since been taken over. A state-owned
copper company was established in 1967 by nationalizing a Belgian firm, but a few
small foreign firms have beer allowed to operate in mining since then.
The new measures are part of a scheme being worked out with the
International Monetary Fund to help Zaire overcome its current foreign exchange
problems. Zaire's estimated balance-of-payments deficit last year was $400 million.
Kinshasa hopes that the return of foreign investors, together with fiscal reforms and
import controls, will give the economy a shot in the arm.
Those foreign firms that have remained active despite nationalization will
almost certainly take advantage of the new measures. Others, such as Mobil, have all
but completely withdrawn and are less likely to incur the expense of reinvesting,
particularly in view of Zaire's shaky economic situation.
Other conditions that have hurt the Zairian economy show no sign of
improving. The low world price for copper, the source of two thirds of Zaire's
foreign exchange earnings, will delay recovery. Zaire still cannot ship copper on the
Benguela railroad through Angola to the port of Lobito. Moreover, implementation
of a number of austerity measures which are part of the IMF program could cause
political problems for President Mobutu.
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National Intelligence Bulletin
January 3, 1976
The Pinochet government evidently intends to ignore a recently published
indictment of its policies by former president Eduardo Frei, leader of Chile's largest
political party, the Christian Democrats.
Although Pinochet was angered, he has decided not to make an issue of Frei's
attack, probably recognizing that strong government retaliation would merely
brighten the fading image of the Christian Democrats as well as further damage
Despite his uncharacteristic decision against a counterattack on Frei, Pinochet
may yet revert to type. Yesterday, Frei rebuffed an offer by the junta to participate
in a "council of state" composed of former presidents and other distinguished
citizens. Pinochet had hoped to create a favorable impression by instituting the
council, which was given formal status in a ceremony on December 31. The council
is billed as a distinguished body set up to advise the government on important
matters, but it is not expected to be much more than window-dressing.
In announcing his refusal to join the council, Frei said it would not be "honest
or loyal" for him to take part in a body whose basis of origin and powers of
representation are in question.
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National Intelligence Bulletin
January 3, 1976
THAILAND-LAOS: Bangkok apparently feels it has made some progress in
inducing the Lao to exercise restraint along the border in return for the Thai
reopening of the border near Vientiane. Foreign Minister Chatchai announced just
prior to the border opening on January 1 that tha Lao had agreed not to fire on Thai
patrol boats along the Mekong; he characterized the reopening of the border as a
normalization of relations. We have no confirmation that the Lao made such a
promise, but Vientiane probably recognizes that the Thai could close the border
again if any serious incidents along the river should reoccur.
GUYANA: Prime Minister Burnham has announced "full support" for the
Popular Movement for the Liberation of Angola, and formal recognition will
probably come soon. During his speech to celebrate the nationalization of Reynolds
aluminum mines, Burnharn introduced three visiting representatives of the Popular
Movement and stated that Guyana will give even greater support to their cause than
it had in the past. Burnharn characterized the Angola struggle as not a civil war but a
war by blacks to throw out the South Africans, whom he accused of trying to annex
Angola. In pledging support to the "freedom fighters" of the MPLA, Burnham said
they were "waging a war that is ours."
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