WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000020002-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 21, 2016
• Document Release Date: April 22, 2009
• Sequence Number: 2
• Publication Date: January 11, 1974
• Content Type: REPORT

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C/4O / C/WR
,BAY
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HEI Id Ill-1107
meekly Review
State Dept. review completed Dept. review completed
C 2,S/ P-5 d 25X1
Top Secret
11 January 1974
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Top Secret
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CONTENTS (Ja-ffrar)r 11, 1974)
by iIi Office of l:cononiic I
o,rrch, the Ollicr( of Slratcgic
'
1
The Middle East
IZc; ori:h, 'Intl till) I)ii rrlur:dc
of :
,r:ie.nci and f ethnology.
5
Internation
l M
Tc;,ir" wrluirini.l more contprchtvlsivo trcalnronl arui Ihnre-
a
oney
frire pit bIr,hid ep,ir'IIf'Iy v; ::special Itef)oil, ire Iislud hI lho
( olitIril".
11 Spain: The Arias Government
12 Ei'ropo: Security Talks; Energy
EAST ASIA
PACIFIC
14 China: The Economy, Aid to Africa
19 Laos: Much Ado About Nothing
21 Argentina: Defiant University
21 Arms Rice in the Andes
22 Ecuador: Oil Policy
~':ESTERN
HEMISPHERE
MIDDLE EAST
AFRICA
23 Zaire: Decolonizing the Economy
23 Afghanistan-USSR: Armor from Moscow
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THE MIDDLE EAST
Disengagement Talks
Egyptian and Israeli negotiators concluded
their sixth session at Geneva on January 9 with-
out reaching agreemert-indeed, without yet
exploring the details of territorial dispositions and
troop strengths. There appears to be some pros-
pect, however, that they will settle down to
specifics when they meet again on January 15.
The Israelis seem ready to withdraw from
the west bank of the Suez Canal to a point some
distance east on the opposite bank; 18 miles is the
most frequently mentioned distance. So far, how-
ever, they have only offered this in terms of a
general principle. Tel Aviv will not move on to
definite proposals until the disengagement issue
has been discussed in greater detail by the
cabinet and Secretary Kissinger has concluded his
visit to Israel.
In return for an Israeli pullback, Tel Aviv is
demanding that the Egyptians agree to reduce
their forces on the east bank. While the Egyptians
may be willing to accept some limitations on their
forces, there have been no indications that they
are ready to accept the kind of sizable reduction
that would satisfy the Israelis.
The Cairo press has treated the disengage-
ment talks circumspectly, giving little indication
of the substance of the discussions and, beyond
the usual criticism of Israeli procrastination, little
hint that the talks have thus far been inconclu-
sive. In order not to give the Arabs the impression
that Egypt is negotiating a unilateral settlement,
government officials and the media have been
careful to characterize the talks as preliminary
military discussions unrelated to the broader po-
litical questions of a settlement that will ulti-
mately affect all Arabs.
Ironically, the very prospect that a disen-
gagement agreement may be reached has raised
new fears in Cairo. Now apprehensive that dis-
engagement could freeze the situation along new
cease-fire lines, the Egyptian press has begun to
emphasize the necessity for a link between dis-
engagement and continued progress toward a
total Israeli withdrawal.
Israeli press commentary on the Geneva
talks has taken its cue from the government radio,
which this week characterized the talks as
"mostly a sideshow" with the real drama being
played out in Washington, Moscow, Cairo, and
Jerusalem. The press, however, has reflected some
resentment over an alleged US ability to influence
the Israeli negotiating position with the Arabs.
One paper saw Defense Minister Dayan's trip to
Washington last weekend as a case of the govern-
ment apparently rushing to the US for the latest
instructions even before Washington had begun to
issue them. Nevertheless, the most recent survey
by one of the more reliable Israeli public opinion
polls shows that more than 82 percent of those
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questioned were prepared to support some ter-
ritorial concessions in return for a peace settle-
ment, with only 14 percent opposed.
Egyptian Foreign Minister Fahmi's mission
to Moscow this weekend is probably aimed at
smoothing over strains in relations and reaching a
meeting of minds with Kremlin leaders on the
degree of Soviet support for Cairo's negotiating
position.
Egypt has never been really comfortable
with the relationship and has for some time been
pursuing policies, domestic and foreign, designed
to keep Soviet influence in Egyptian affairs to a
minimum. At this stage of the negotiations, how-
ever, Cairo views its ties with the Soviets as criti-
cal. The USSR is currently Egypt's only major
source of arms and, should the Geneva talks break
down and the war resume, Cairo will look again
to Moscow to resupply its armed forces.
In political terms, Soviet support is less im-
portant, since Cairo is depending primarily on the
US to produce progress toward a settlement.
Nevertheless, in Egypt's view, Moscow can serve
as a useful source of leverage if negotiations do
not proceed favorably.
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Fahmi's primary aim will thus probably be
to ensure a continued commitment of Soviet
backing. At the same time, he will try to make
sure that this is accomplished largely on Cairo's
terms-without restricting Egypt's independence.
From Moscow's standpoint, the visit, al-
though apparently initiated by the Egyptians,
serves as a useful counterpoint to Dayan's visit to
Washington. The Soviets probably also welcome
the opportunity to discuss more closely Egypt's
specific negotiating positions.
Egyptian Cabinet To Be Revamped
President Sadat has been involved in an in-
tensive round of consultations with cabinet min-
isters and domestic political figures. He is appar-
ently preparing a cabinet reorganization that
would enable the government to deal more effec-
tively with postwar reconstruction if a disengage-
ment agreement is concluded. Sadat is scheduled
to address a joint session of the legislature and the
Arab Socialist Union on January 18, and he could
use the occasion to announce both his policy and
his. new ministerial line-up.
As plans appear to be shaping up, Sadat
would relinquish the post of prime minister,
which he assumed in March 1973 to consolidate
his control in preparation for the war. Minister of
Finance and Economy Hijazi is the leading can-
didate to take over the post. The Cairo press,
which has talked openly in recent days of Sadat's
plans for "making c'mprehensive development
the aim of the next stage," has all but explicitly
named Hijazi as the prime ministerial choice.
Hijazi has the administrative and the eco-
nomic experience for the job. Last summer, he
was behind the revitalization of a liberalized eco-
nomic policy that Cairo had originally conceived
several years ago to attract greater private foreign
investment and generally to ease Egypt away
from its socialist orientation. The October war
stopped implementation of the policy, and its
future now will depend on the conclusion of a
disengagement agreement. In fact, real progress
toward economic liberalization and reconstruc-
tion depends in large measure on an end to Egyp-
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tian saber-rattling-a tactic Cairo is not prepared
entirely to forgo in the absence of a final settle-
ment.
Nevertheless, the cease-fire has added new
pressures for economic development. Popular dis-
content over economic ills has long been a prob-
lem for the Egyptian leadership. The war was a
distraction, but the prospect of protracted nego-
tiations promises to bring dissatisfaction to the
surface again unless the economic situation is
improved.
Moreover, Sadat has long felt self-conscious
about Egypt's technological inferiority to Israel
and, having restored a measure of military re-
spectability, he probably feels that Egypt should
now demonstrate a capability to achieve a sem-
blance of equality in other fields. A disengage-
ment would, furthermore, provide Egypt with an
opportunity to proceed with plans to re-open the
Suez Canal aid rebuild the canal towns.
Minister of Finance and Economy Hijazi
Leading candidate for prime minister
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INTERNATIONAL MONEY
The dollar's rapid rise in early January was
abruptly halted on January 9. Bonn's announce-
ment that it was removing all foreign-exchange
contr,.,is-introduced in 1972 to slow massive
dollar inflows-set off the traders' shift out of
dollars. Other factors in the reversal included an
apparent easing in Europe's oil supply situation-
as reflected in the postponement of Germany's
weekend driving ban, intervention by both the
German and Japanese central banks, and inter-
national recognition that Libya had raised the
posted price of its oil to only $15.76 rather than
the erroneously reported figure of $18.86.
The mark remains
below its previous central
rate despite intervention by
the Bundesbank, which has
exceeded $740 million thus
far this month. Sterling,
under pressure because of
domestic labor problems,
also began to strengthen
slightly after setting record
lows earlier in the month.
Despite the fluctua-
tions of the European cur-
rencies, little internal pres-
sure has been exerted on
the European joint float
since it became evident that
the Dutch would continue
to receive oil in the face of
the Arab embargo. Al-
though the energy crisis
will have different effects
on the economies of joint
float members, speculation
now centers on the rela-
tionship between the float
currencies and non-partici-
pating currencies rather
than on the internal parity
structure of the joint float
itself.
erating world-wide inflation.
The Japanese central bank-after spending
$3 billion since November 13 to support the yen
and to avoid the inflationary impact of a devalua-
tion-now has allowed the yen to depreciate by
6.7 percent. Tokyo is carefully watching the sup-
port operations of European central banks.
The price of gold has also skyrocketed to
new highs and was quoted at $124 per ounce on
January 9. In early 1973, gold demand was
spurred by the dollar's weakness. In recent
months, the demand has been driven up by the
weakness in other major currencies and the accel-
Percent Change Since 2 January 1973
In the Value of the US Dollar
Relative to Selected Foreign Currencies
10r-
-301 . . . . . . . . . . . . . V , . L M " 1 . . .1 1 1 _1 -1 1 . 1 1 1
192330623202741118251 615222051320273 10172431714212851219262 0 162330 7 1421204 79
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
W6lotl,e to 16 m5/or cun.ncl96
555054 1 14
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Aleksandr Solzhenitsyn's latest book, Gulug
Archipelago, published in a Russian-language edi-
tion in Paris on December 28, once again con-
fronts Soviet leaders with a dilemma. They can
permit the author of the book, a detailed history
of Soviet police terror and the prison system from
1917 to 1956, to go unpunished only at the cost
of jeopardizing their efforts to control the pro-
duction of Soviet writers. They are also aware,
however, that such retribution would precipitate
reaction abroad that might undermine Moscow's
policies of detente.
The impact on detente of the publicity that
the book and its author have already received in
the West is undoubtedly being closely watched by
the Kremlin. Its concern is underscored by West-
ern press speculation that predicts trouble for the
third stage of the conference on European secu-
rity and cooperation in Geneva if Moscow arrests
or imprisons Solzhenitsyn.
The depth of the leadership's dilemma was
demonstrated by the long delay in its public re-
sponse to the book. The first criticism of Solzhe-
nitsyn, almost a week after publication of his
work, appeared in broadcasts beamed abroad. The
Soviet press did not address the subject at home
until January 6, and then only by quoting attacks
on Solzhenitsyn by foreigners-mostly European
communists. No more authoritative statements
have been issued to domestic audiences, even
though news about the book has been widely
disseminated by Western radio broadcasts, and
Radio Liberty began broadcasting the entire text
on January 5. Soviet commentary has predictably
labeled Solzhenitsyn a "slanderer" and "rene-
gade," but has carefully avoided the key issue of
the penalties that may be in store for him.
This tardy and su far cautious response may
indicate some indecision among the leadership.
Whatever decision is reached will have to weigh
the regime's internal security interests against its
foreign policy goals, and consensus would be dif-
ficult. The relatively low key response could also
Aleksandr Solzhenit"s n
mean that a decision has already been made not
to punish Solzhenitsyn and to play down the
case.
One veteran Western correspondent in Mos-
cow cited "usually well-informed Soviet sources"
as saying that punitive measures were not likely
to be taken against Solzhenitsyn. The "sources"
gave as reasons the probability of an international
outcry as well as Solzhenitsyn's threat that action
against him would result in the publication of still
more manuscripts. This view was later backed by
a senior Soviet commentator, who told a tele-
vision audience that Solzhenitsyn would not be
given a "pretext" to complain of persecution.
Solzhenitsyn himself apparently believes
there is a real possibility that he will be arrested
or imprisoned. He said as much to three French
visitors a few days after publication of his book.
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The Spanish cabinet underwent an extensive
shakeup last week following the assassination of
Premier Carrero on December 20. No dramatic
policy changes are expected from the new govern-
ment, however, which is expected to carry out
Franco's plans for political and social develop-
ment. Although the regime is emphasizing the
relatively smooth transfer of power, the system
will not get a critical test until Franco is gone.
The new premier, Carlos Arias, has given his
own imprint to the new cabinet by bringing in 11
new men and keeping only 8 holdovers. The new
ministers appear to have been chosen for their
loyalty to Franco and their professional com-
petence, not because they represent any par-
ticular faction. Forming a more cohesive group,
they will function with less bickering and will
arouse fewer animosit!es than some of their
predecessors.
Arias has a reputation for strict adherence to
law and order as well as for efficient administra-
tion. Along with a tough interior minister, Arias
has chosen a number of moderate, pragmatic
individuals to head ministries in the economic and
social fields. These appointees are known to be
interested in easing the economic and political
restraints that have hindered Spain's efforts to
develop closer ties with NATO and the European
Communities.
For the first time, the cabinet includes three
vice premiers, headed by the interior minister as
first deputy. They apparently will form an inner
cabinet to assist Arias in handling security and
economic matters as well as pressures for popular
participation in government. None of the three
has a political following of his own, and would
not be expected to succeed the 65-year-old Arias
on other than a temporary basis.
Foreign Minister Lopez Rodo, the last re-
maining member of Opus Dei, the Roman Cath-
olic lay organization whose members dominated
earlier cabinets, was not reappointed. Other mem-
bers of Opus Dei were eliminated from the cab-
inet last June, a move that reflected general dis-
enchantment with the growing influence of this
faction. This cabinet is also the first one since
Franco came to power that does not include a
military figure-other than the three service min-
isters. The military reportedly were reluctant to
become associated with the new government be-
cause of the difficult problems it faces and prefer
to remain above the fray for the time being.
The government's reaction to the assassina-
tion has not led to massive arrests, as some oppo-
sition figures had feared. The police have concen-
trated their efforts on tracking down the six
members of the Basque terrorist group known as
ETA, who have been accused of the crime.
In his initial statement at the installation
ceremonies, Premier Arias emphasized the posi-
tive. He promised to maintain order so that
Spaniards can develop their rights and liberties.
He also said his government attached great impor-
tance to participation by the people in the politi-
cal process. Although these statements were care-
fully qualified, they leave the door open to the
possibility of some easing of political restric-
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The force rodtiction negotiations and the
Conference on Security and Cooperation in
Europe resume next week in Vienna and Genova,
respectively. The NATO and Warsaw Pact partici-
pants have thus far outlined general positions. In
MBFR, difficult bargaining lies ahead to identify
specific issues for negotiation. In CSCE, the issues
are clear, but major substantive differences
remain.
In Vienna, the Warsaw Pact has submitted a
specific draft agreement for discussion, and the
NATO allies have spelled out their proposal for
MBFR through a series of presentations. The
Warsaw Pact is calling for the direct participants
in the talks to negotiate one agreement in owing
a three-phased reduction of forces beginning in
1975. In the first phase, the direct participants
would make a symbolic combined reduction of
20,000 men. The remaining forces would then be
reduced by 5 percent on each side and then by
another 10 percent. Air and ground forces and
their equipment, including nuclear weapons,
would be cut in each phase.
NATO proposes that only US and Soviet
ground forces be cut in a first phase and that a
second phase of reductions should result in a
common ceiling for NATO and the Pact of about
700,000 men. Only ground forces would be cut,
and the reductions would be asymmetric, with
the Warsaw Pact making larger cuts than NATO.
The Soviets seemed generally pleased by the
course of the first round and feel that they scored
some tactical successes. For this reason, it is
unlikely that they will start the next round with
any new proposals or approaches. They will con-
tinue to pursue themes that were stressed during
the opening round and in commentary since then.
Moscow and its allies will continue to place
particular emphasis on including both foreign and
national forces in all stages of reductions. The
USSR's initial concern that West German forces
would be disproportionately strong if US and
Soviet troops were reduced first has boon in-
creasod by recent talk of West European defense
cooperation. In their private statements, however,
the Soviets have suggested that they might be
amenable to reducing US and Soviet forces first,
provided there is a firm commitment by the West
to reduce national forces in a sucond phase.
The Sov!ots will continue to argue vigorously
against the Western concept of asymmetric reduc-
tions. They have used a variety of arguments
against asymmetry, but have emphasized that
Western inferiority in some areas is compensated
by superiority in others, so that an over-all bal-
ance exists. Thus, while the NATO countries
stressed Warsaw Pact superiority in ground forces
and armor, the Pact strove to include air forces
and nuclear weapons in a total reduction package.
The Soviets have hinted that ttioy might accept a
common coiling in which air and ground forces
were included.
Tha NATO allies still must decide on their
tactics for the next round. Some British officials
have suggested that the Western side should go
slow in the negotiations, and officials in several
European states believe the Western side should
make no firm commitments to reduce national
forces. Recent comments by a West Gorman of-
ficial suggest that Bonn wants no reduction of its
regular armed forces. The allies will probably at-
tempt to focus the negotiations on a possible
agreement to reduce only US and Soviet forces.
The NATO allies maintained a united front during
the first round of talks, but the difficult decisions
they must now make might bring existing differ-
ences to the surface.
In Geneva, the representatives of 35 Euro-
pean states must resolve major substantive differ-
ences. Moscow's goals for the conference are to
obtain a multilateral ratification of post-war
borders in Europe and to institutionalize its con-
tinuing voice in European affairs through the
adoption of some sort of post-conference machin-
ery. The Western states hope to gain recognition
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for the possibility of peaceful changes of borders
and to obtain freer communication between East
and West.
The Soviets have recently hinted that they
might be willing to compromise on the latter
issue, but it is by no means certain that Moscow
will actually offer concessions that will satisfy the
Western side. Resolving differences on this topic
and other contentious issues such as so-called
"confidence building measures"-slaps to limit
certain military activities-will probably take
several months.
The sharp rise in petroleum prices is stimu-
lating the interest of West European countries in
establishing an independent capacity for enriching
uranium to meet future energy needs. The situa.
tion Is confused by the claims of rival projects
and by varying degrees of interest in securing US
participation. Moreover, the politically powerful
power companies, primarily interested in assuring
adequate supplies at "reasnnablo" prices, do not
necessarily share government views that are often
influenced by questions of prestige.
France's partners in Eurodif, the projected
$L6-billion gaseous diffusion plant for anriching
uranium, are beginning to respond to the French
announcement last November that Paris would
proceed on its own, if need be, with construction
of the facility. Rome has agreed to contribute
22.5 percent of the cost of the project. Belgium
appears close to a commitment of 10 percent, and
Spain is likely to go along for another 10 percent.
Sweden is the most reluctant of the partners and
reportedly will not decide until mid-June whether
or not to participate. Sweden's projected share of
10 percent, if taken over by the French, would
give France a majority, an eventuality the others
hope to avoid. Press reports now indicate that
Saudi Arabia is also interested; it might seek
Sweden's sharp. The choice of a site has narrowed
to Franco or Italy and will be decided this month.
The possibility of collaboration between
Eurodif and the US Atomic Energy Commission
has aroused controversy, The F=rench bureaucracy
is divided, with the national of ctric utility in
favor of obtaining US technology, while the
atomic energy authority has assumed a go-it-alone
attitude; the other Eurodif members would like
to explore the question. A recently formed group
that includes, as members ct assoriates, all the
electric power companies of rance, Italy, Bel-
glum, Netherlands, Spain, Switzerland, and Aus.
tria is pressing for US-European cooperation. The
leaders plan to meet on January 14, and also hope
to hold talks with Eurodif and US officials. They
believe Eurodif is now showing considerable
flexibility and tray agree to cooperate with the
us.
The other major European uranium enrich-
ment project, Urenco, which depends on the less
expensive but unproved centrifuge process, is also
moving ahead. Urenco has attracted support
because it requires only one tenth the power
called for by the diffusion process. The three
backers-West Germany, Britain, and the Nether?
lands-hope to complete an initial study phase in
mid-1974. The West Germans ate hopeful that
(luring a second phase later this year the now US
initiatives for cooperation in energy research and
development may bring help to Urenco on
centrifuge technology.
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Indonesia's revitalized student activists sea
the visit do ..t week by Japanese Prime Minister
Tanaka as an ideal opportunity for large-scale
protests. Otiginally confined to the two national
univtttsity centers of Jakarta and Bandung, stu-
dent protests havig now spread to provincial uni?
vetsity towns. Over the past months, student
groups have mounted a series of small but wall-
publicized visits to various government depart'
rnents requesting "dialogues" on economic and
social policies, In an effort to ease the situation,
President Suharto has agreed to meet with a Stu-
dent delegation today to discuss development
programs and listen to their critiques of foreigo
investment policies,
1anaka's visit is viewed by the students as an
opportune tittle to arouse public sentiment
against the shortcomings of government policy by
focusing al tent ion on alleged Japanese dominance
and exploitation of Ic),lonesia's economy,
Bandung students have already challenged 'Tanaka
to discuss those issues with them, This type of
student activity is a hot potato for the Japanese
Lmbasy, which is acutely aware of Indonesian
criticism but uncertain how to handle it. In tea
wake of mid anti-Japanese protests last week,
Some prominent neon signs advertising Japanese
product; have been turned off despite the raluc?
Lance of tea merchants involved.
Tile Indonesian Governs: nt cannot take
much comfort in the fact that the ?'udents appear
to be focusing on a foreign target. Anti-Japanese
sentiment also provides a launching pad for a
general attack on government coziness with for-
eign investors, which the students allege is stifling
indigenous business r iterprise. The propensity of
Japanese businossr n for dealing with local
Chinese rather then with Indonesians is cited as
proof of the students' argument. Taking the issue
a step further, the students charge that these
Japanese-Chinese business cabals provide the
money that allows Jakarta's military elite to live
in opulence while other Indonesians mu,t struggle
for existence.
"The Suharto government is trying to strike a
conciliatory stance, seeking to avoid an outright
confrontation with the students that would give
them a cause celebre. Indonesian security officials
are also keeping an eye on how Tanaka fires
elsewhere; the Jakarta press has been giving broad
coverage to anti-Japanese protests by 'Thai stu-
dents, Small protests in Jakarta would strengthen
Suharto's hand in negotiating more favorable
deals with Tokyo, but the government fears wide-
spread demonstrations that would be embarrass-
ing.
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critics such as the downgrading of South Korea's
Central lntelligenme Agency and the reorganize.
tion of the cabinet-only whetted the opposi-
tion's desire for more far-reaching changes, in-
cluding perhaps his own resignation.
In adopting those new measures, Pak is
gambling that the threat of government repression
will again be sufficient to silence his critics, lie
means to shatter the protest movement before
universities reopen in thm spring and provide a
potentially explosive base for his opponents. Pck
clearly intends to follow through with his threats,
but he is not insensitive to the need for ome
The government moved clostir to a serious
political ccnfrontation with its domestic critics
this week :s President f'ak set aside hi:. efforts to
mollify dis.-o0ent groups and moved toward harsh
measures. Deor:rv concerned with snowballing
demands for constitutional reform and political
charge, which wool(: weaken his authrnrity, Pak
issued two omerr?,ncy decrees making further
protest and cri,i,ism of his regime punifhable by
court martial and mprisGoment.
His moves :he first direct actions to curb
thr?e months of persistent unrest-were aimed at
prominent civilians circulating a well-publicized
reform petition and at senior politicians who have
rucently spoken out against the President's au-
thoritarian policies. The ramifications of Pak's
moves a'e broad. mar .ing a return to the police-
state controls used in 1971 and 1972 to repress
similar opposition. The moves also reflect Pak's
judgment that recent efforts to appease his
It iy too early to judge the reaction to Pak's
moves. Mot politicians will probably find it
prudent to held their peace and ,wait further
action by the more militant Christians, students,
and intellectuals, In a cautious gesture, the op-
position New Democratic Party has called-un?
successfully- for a special meeting of the National
A..scmbly, Tougher critics, ho.:c.cr, may view the
President's moves as a challenge that cannot go
unanswered; they run grave personal risk it they
do.
Pyongyang's Responsri
Seoul's fiction may be interpreted by North
Korea as evidenca that the South is approaching
serious political instability. The situation has al-
re.ady provided the North with additional reasons
for rejecting Seoul's latest overtures for a resump-
tion of the North-South dialogue. The North
Koreans recognize that forward movement in the
negotiations st this time could ease Seoul's cur-
rent domestic troubles and are claiming that the
emergency measures damage the prospect for
resuming the dialogue.
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Primp Minister Souvanna, who has mounted
a persona) crusade for a rapid and smooth for-
mation of a now coalition government, is also
keeping a close eye on developments, He put
government forces in Vientiane on alert late last
month, following reports that the rightist
Sananikone clan was bent on serious trouble-
25X1
LAOS: MUCH ADO ACOUT NOTHING
Nearly four months have elapsed since Ilia
protocol to implement the 1Tobruary 1973 peace
agreement was ,igned, but a now coalition govern-
ment i; atilt nowhere in sight. The protracted
delay has resulted in a growing sense of frustra,
lion and uneasiness on both sides. This has, in
turn, given rise to a now spate of coup rumors,
but there is no hard evidence that any serious
plotting is under way.
The Communists, in particular, are appro.
hensivo about some sort of power play by dis-
gruntled con;Lrvative. ;radio Pathet Lao lies 1t-en
weighing in with charges that "Vientiane
ultearightists," in collusion with "Thai and South
Vietnamese reactionaries," are scheming to
sabotage the cease-fire and negotiations on a new
making, but he seems to have ca0med dtown
recently as a result of thu rightists' reassurances
that their hands were clean. In a tour d'horiton
last week with the US ambassador, the Prime
Minister appeared relaxed and less inpatient with
the slow progress registered to date on the
negotiations front than he had been in several
weeks.
Nevertheless, Souvanra may still encounter
considerable difficulty within his own ranks in
reaching agreement on a now government. The
rightists remain highly apprehensive over the
influx of Pathet Lao security forces into Vien.
tiane and Luang Prabang, and they are again
voicing serious concern that Souvanna may be
prepared to sell out rightist political and
econo.nic interests to gain Lao Communist agree.
mont on a now government. Vientiane rightist
spokesman Ngon Sananikono recently discussed
the possibility of forming a now alliance among
the major conservativo elements in Laos as a
safeguard against such a move by Souvanna F-
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Jan 11, 74
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 Page 2i
The arrival of ',oviet Sank; in neighboring
faro ha; increased the detersoinalir-n of the nmill-
Lary ruler; in Chile anti Lcr-arlor to nioderni;e and
expant! their owner, force;. Chile reportedly is
car;idering couriteri'' ' the Peruvian actluisition
with new f-tenal ta.tk; and anti-tank weapons,
Lcuadr,rean officers are tepMted to he calling for
it rthajor te-egoiprnenI progtarti, and decision; on
awns purchase, are likely ,oon.
Itorder di-,pole', resulting from past war;,
desire lot revenge, and jealousy over natural re-
source; still color telattorl; among the A:idean
state;,
The centenary in 1919 of the War of the
Pacific. in which C',ile defeated Perri, already is
heightening apprehension in Chile of Peruvian
revanchism, Chilean; ;,re well aNare that Peru's
milifa' y doctrine call; for national honor to be
redeemed before the passing of a century by
recovery of lost suulheto province;, Chilean mili
tary men, who view the ouster of Allende as
ending a period of national dcclirie, fF at that Peru
could decide to strike a long-10,111110d blow before
Chile can recover aril rearm, chi: an officers alsr,
see Peru as the potential cr'nter of subversion
inspired by Moscow--and ifavana---against their
;tritlently alit i-Cornrntill i;t regime.
Lcuador, for its part, has never reconciled
itself to Ilie Io;; of its Arna;onian territories to
Peru in 1941, it feat; that Petit now covets even
more territory in the oil-rich ?rrt'n,r (east),
In Peruvian eye;, berth Chili, and Lcuador are
potential a,lgre;;or;. Copper mines in the south
and oil in the nuttheact are seen a; temptations
for Chilean expan;ivni;ts and Ecuadorean re?
vanchi;m. Following the d astic change Iii Chile';
political orientation last ~apternber, Peru's mili-
tary leaders began to perceive of their nation as a
beleagucned "revolutionary" outpost bordered by
unsympathetic regimes subject to the "Irnpenal-
ist'' influences of the US and Brazil. Peru and
Chile both believe that the other might try to
milieate its internal difficulties by focusing do-
mestic attention on , foreign enemy.
To a disinterested third p,rty, the old dis-
putes and persistent suspicions that pervade the
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AHUNTINA, DEFIANT UNIVERSITY
Pre;iderit ('coon ha; ;o far stayed aloof from
a potenfiatly serious dispute between the national
university ,,tint the Lducation Ministry, involving
the refusal of fhe new university rector to abide
by a ministry order. Larly in Decenii et, Ltlut:a-
tion Minister Jotge Iaiana ordered the tli;mi;;al
of two leftist f'eronist professor; who had puh?
li;lied articles attacking sortie of Peron's closest
advisers. the rector, whore Peron had appointed
to replace a leftist named by predecessor Hector
Caripora, has sided with the pri,'occur;, Ile con.
tends that a recently enacted law allowing the
firing of civil servants for opposing the govern.
ment doe; not apply to Peroni;ts.
Problem; with the universities are not new
to Argentina. F=ollowing Carnpora'; inauguration
last May. Per onist?appointed intervento(;, roost of
their) political Iefli;is, overturned curricula and
fired many university faculty rnernbers for being
anti?Peronist reactionaries or under foreign---poi
inatily US -- intellectual influence;, Similar purges
have occurred before. When Peron became prr,;i-
dent in 1946, for example, there were whole;ale
dismissal; of prole;;or;. twenty year,. later, mili-
tary president Onganra occupied the universities,
prompting approximately 15 percent of the fac?
ulty of the University of Iluenn; Aire; to resign
and rtiany to leave the country,
In addition to the recurrent politicisation of
scholarly activities. Argentine univercitie; are
overcrowded and ;port of funds, Although the
studr'nt population ha; ter+n growirq ;ii the rate
of 15,000 a year, government a;;iaanca is likely
to decrease, Minister taiana ha; ;aid that priority
will be given to primary and secondary education.
As a result, the quality of tmivet%ity instruction is
not likely to improve.
Leftit.t professor; may continue to exercise a
predominant influence over educational policy,
even if Iaiaria decides to push his case against the
rector, and Peron Wait chaiacteiicttcaliy remain
aloof. While Peron will probably manage to weed
out some of the more extremist professors, a
major campaign against Marxists in the etluca?
tional system would completely alienate his In-
creasingly disillusioned student supporters at a
time when he has his hand; full with terror-
ism.
 Under the agreement signed with Texaco.
Gulf last August, thin government has an option to
purchase a 2b-p(rcent interest In the consortium
in 1977, Publicly, the government said it is rnov?
ing ul) the purchase (late because of a reconrnen?
dation by OPEC that member states gain greater
control of foreign oil companies operating in their
countries. Another, and equally powerful, motiva?
lion is a desire to take advantage of rising world
oil prices and increased interest in Ecuadorean oil
by col"itrivs other than the US.
Japan is attempting to arrange a long-term
agreement to barter its manufactured goods for
Lc.uadoreai) crud oil. Quito would also like to tin
these oil sales to Japanese purchases of Lcuado?
roan bananas. Tokyo already is helping Ecuador
set up a national oil tanker flee; and has been
awarded a contract to build a $90?inillion refinery
by 1976. Other countries that may be willing to
make special trade agreements to get Ecuadorean
oil include Mex'ro, Peru, Brazil, and some in
Western Europe.
Strong nationalistic sentiments and a desire
to appear "independent" influence Ecuador's oil
policy. Measures such as demanding renegotiation
of existing contraLts with terms less favorable to
the companies already have led some US oil firms
to leave Ecuador. A recent agreement with Ro-
ma m a to cooperate in developing petroleum re-
serves may also be employed as a lever to check
US companies' "control" of the industry. Buying
into the US companies would be another means
of giving Quito a greater voice in determining
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Andes have an wt of unreality. But to the military
risen involved, the mutual animosities, fears, and
suspicions am deeply felt. An arrlis race may
develop in earnest and-to the participants, at
least-armed conflict is far from unthink-
able.
The military government's annnrncernent
that it intends to acquire a 25-percent interest in
file Texaco-Gull consortium) this year may be the
first in a series of moves to in(mease Ecuador's
control of its petroleum industry. Practical ceo-
nomir. concerns, however, probably will cause the
government to give careful consideration to fur-
them moves against foreign oil companies.
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which is heavily engaged in exploration and pro..
duction, has boon exempted.
It will be some time before the government
Works out a viable mechanism for indemnification
and an orderly take-over. A period of public con-
fusion, potty corruption, and economic disloca-
tion has already set in and is likely to last for a
while. Mobutu is determined to make the new
measures work, however. If he succeeds, he may
turn to other sensitive economic issues, notably
the repatriation of profits by Belgian technicians
and managers who work in Zaire under lucrative
government contracts.
Afghanistan-USSR
ARMOR FROM MOSCOW
Kabul is g,~tting new armor from the USSR
to modernize 'its army. During the past year, at
least 140 pieces of Soviet armored equipment,
including 85 tanks, were delivered to Afghanistan.
Most of this equipment was received after the
coup in July, but there is no evidence to indicate
whether these deliveries were arranged prior to
the coup, whether they were accelerated at the
-equest of the new government, or whether they
represent new assistance granted since July.
The numbers and types of equipment deliv-
ered th.is far suggest that the Soviets intend to
improve Afghan military capabilities qualitatively
rather than quantitatively. The military can use
new tanks because about 200 of its tanks are
obsolete T-34 medium tanks, at least a quarter of
which probably are ir.operable.
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If President Mobutu Soso Soko has his way,
1974 will bo the year of economic independence
for Zaire. He recently ordered a series of moves
aimed primarily at the t3olrjlans, who still have a
large stake in Zaire's economy, but others will be
affected also.
Mobutu contends that the Belgians have re-
sisted "Zalrianization" while other foreign invos-
tors--mainly US, Japanese, and British-accepted
his new policies long ago. In late November, he
again sounded the theme of economic indopend-
enco in a major policy statement that accom-
paniod a number of sweeping measures to reduce
foreign involvement in his country's economy.
Henceforth, the government will:
? demand 50 percent partici7ation in all
future mining concessions granted to foreign
investors;
? establish m-nopolies in import-export,
timber exploitation, insurance, and con-
struction;
? require, effective next year, all compa-
nies that will have been in Zaire for five years
to turn over their top management positions
to Zairians.
In addition, Mobutu declared that all for-
eign-owned, non-industri it enterprises-such as
plantations, ranches, and rarms, most of which
are owned by Bclgi. -is-are to be turned over to
private Zairian owners, who will reimburse the
present owners. The government also has forbid-
den Portuguese and Asians to reside in certain
areas of the country and has ordered them to
prepare their property for sale to Zairians. This
action will be especially popular, as Zairians re-
sent Asian domination of trade in the interior.
In related moves, the government subse-
quently expelled the Belgian advisers to the Bank
of Zaire and informed Brussels that it wishes to
buy out the Belgian-owned Commercial Bank of
Zaire. It also nationalized, promising compensa-
tion, all foreign-owned petroleum storage and dis-
tribution facilities. This move affects Texaco,
Shell, Mobil, and the Italian firm, Petrofina. Gulf,