Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
December 21, 2016
Document Release Date: 
April 22, 2009
Sequence Number: 
Case Number: 
Publication Date: 
January 11, 1974
Content Type: 
PDF icon CIA-RDP85T00875R001000020002-3.pdf1.33 MB
Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 C/4O / C/WR ,BAY U,i,~ ` 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 COPY N! Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 435 Top Secret 25X1 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 1hc: Wt.I I.Y (tl.Vlt'W, iv;trcrl t,vcry I-riday olorninq by the. Oflh_c (it ('urrt'nt IriteI'igeitr.tt, rvporls dncl ,malyzes slgnil.. ir'Inl develr>pntenls ril thrt wcr:k Through noon on "I"hur',dny. II fie(lui'ntly i,rcludes runleti.il coortlinalnd with or prelml-e t 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 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 25X1 25X6 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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 Page 1 Jan 11, 74 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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. Page 2 Jan 11, 74 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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- Page 3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 25X1 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 Page 5 Jan 11, 74 _ _ ., Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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. Page 6 WEEKLY REVIEW 11 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Next 3 Page(s) In Document Denied le Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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- Page 11 WEEKLY REVIEW Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 14 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 Page 12 WEEKLY REVIEW Approved For Release 2009/04/22 CIA-RDP85T00875R001000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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. Page 13 WEEKLY REVIEW Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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. Page 16 WEEKLY REVIEW Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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. Page 17 WEEKLY REVII W Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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- Page 19 WEEKLY REVIEW Jan 11, 74 25X1 25X1 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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 Jan 11. 74 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875RO01000020002-3 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 Page 22 WEEKLY REVIEW Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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. Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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. Page 23 WEEKLY REVIEW Jan 11, 74 Approved For Release 2009/04/22 : CIA-RDP85T00875R001000020002-3 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,