WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000040001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 31
• Document Creation Date: December 22, 2016
• Document Release Date: May 1, 2009
• Sequence Number: 1
• Publication Date: March 1, 1974
• Content Type: REPORT

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G'l~~ Cc ~ C 1 t-'
c_.
Top Secret
C 25X1
Weekly Review
State Dept. review completed.
;jI
Ed= io livs
J1 1 3 07,_jjq.
Top Secret
1 March 1974
Copy N2 426
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CONTENTS (March 1, 1974)
The WE.i_.f1,1._Y RE.VIEW, ip', in rho auturlut o)f
1974.
The plan for cooperation was v : in keel aril
earlier this year by a group of Middle Last experts
lion) the foreign ministries of the LC states, acid
was approved by the political director', in early
February. The cooperative venture would ulclt,de
matters within the purview 0f the LC as well as
others such as Cultural relations that are out-
side. For tills rca',on, the politic al c on)nlittee
recoltunen(led that t1)'! Gentian) foreign nru)ister
51)0111(1 carry on the oegotwt ons Ill both b!',
roles as president of the political Consultative
group and as president of the LC Cuum 11.
A number of t_(1 rn' nlher', Oro plcssrr)q for
early .rclon, with an eye on the rotation,ll pattern
for the 1_C presi(11!ncy. the West German', IM! IF)
tine chin (Mill ,July. but the I (loch Wi;, take over
for the following six months,
f'ar rs (_oulcl 11)11', r 1',,1)
inorttnl,)te political herlc!fit born a (folly of several
month', in Initiating the nwq,)ti,ition'..
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Less (hart twt, week, after Iii,, visit If) Cuba
and the (JS, Soviet I uloigr Minister Gruntykc)
was fill ill(! IOn(I aganr, trying to keel) (II) the
ntonterhim of detente in 1_:urope even though the
Middle La"t situation was ',till very much on his
miner.
r)tuin( Iii', vi',il IO I ranu hone I ci)ruary
15.18, Gin myku did nul stake t,tuch headway
with any of (he problem, that have appeared in
Soviet-It tench relations over the past few months,
but he at least kept therm from getting worse.
Paris ha'. been troubled by what it regards as a
Soviet failure to consult adequately during the
Middle Last war, while Moscow ha', serious reser-
vations about the interest the French arc showing
Ili W(!',t Lotopean defense cooperatiun. The So-
viets h,rve also been disturbed by I:10 tee's unwill-
Ingncss to participate in M(3Ff,, and stay feel that
this attitude is sp)cading to other West Luropr!ari
countites.
Many of thcie pra.)blent, can only be tesolvecl
at the ',outrun, if at all. Some pitrgrtlss ntaly be
nct(le d ilmol Fresrctartt hontpi(Iou'', tiip to the
USSk, whi(:h) has been under cOnsidelatiml for
sonic (into. During Grontyko's stay ill Paris, it was
announcccl that the trig) will take place in early
Mauch, plubably next week. Looking fullhe'
ahead, Ilm S()VI(!t',, Who) am f)reS(II11,11)ly .1wal(! Of
Prn)tpi(lu.l's declining heal Iii, wi;l have! to cun',ic'el
the policy they will take toward ranee after his
(l1palltue front the political scene.
Oil(,, reason for (arontyko's till) Iii Home
from I n ,tIauy 18-22 besides touching ba:,e with
the lt,tlial)', was to see the Pope. I he Vatican has
recently been displaying a inure t)ragm,rlic ap-
prO,lch tOWard church-state relations in cfin11)tU-
ni%t countries. With Moscow'; approval, the Last
Luropean Iegimes with I,ugc Roman Catholic
populations have been respondinq in kind. The
Soviets probably believe that in an era of detente,
with Last-West contacts increasing, it is useful to
neutratiie a potential source of internal discord In
Eastern Lurope.
While ill Rome, Grontyko touched on the
Middle Last sittiartion, exf)Iessinct Moscow'', irrita-
tion at being pushed Ion) center stage in the
r.egoliations. 10 rcdSSer t the Soviet ic;ie, the For-
atyn Mini',tci embarked fin Iii-, own tour of Arab
capitals going to t)arta)',ctis On February 27 and
schcdulntg a visit to Cairo MI M,ucII I.
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Eastern European
Foreign Trade Growth
EASTERN EUROPE: FOREIGN TRADE BOOM
Lastern Europe's foreign trade boomed in
1973, and most of the countries plan even larger
growth this year. While Eastern Lurope as a whole
accumulated a record hard-currency deficit with
the West, its trade with the Soviet Union was
again in surplus.
Total trade grew some 17 percent last year-
double the average annual rate for 1960-72 and a
20-percent increase is planned for 1974. With the
exception of Hungary, all the countries ran hard-
currency deficits. Total debt to the developed
West -almost $5 billion at the end of 1972 grew
substantially. Poland and Czechoslovakia amassed
record hard-currency deficits of $1 billion and
$300 million, respectively. East L= uropean imports
were paced by large purchases of high-priced agri-
cultural products and raw materials corn, soy-
beans, and cattle hides. Western machinery and
equiprnlent also remained in high demand, with
purchases by Romania and Poland leading the
way.
Eastern Europe's large surplus with the
Sovict Union I.,st year reflected the USSR's con-
tinued heavy purchase of conrumcr goods. Soviet
deliveries of fuels and other raw materials were on
sch-dule. Planned dellvcri c of thn5d coinmoJities
through 19/5 should be sufficient to forestall
major energy problems in Eastern Europe.
Poland and Romania, the countries ir.6th the
fastest growing trade with the West, r"o not plan
to cut back on their purchasing this year. Czecho-
slovakia also is likely to buy more Western
machinery. East Germany will probably reduce its
trade with the West. while machinery imports by
Hungary and Bulgaria will rise rnoder :ely. This
pattern will probably continue throur,h 1975.
In the next plan period--1976-80-the East
Europeans face serious raw-material supply
071 197;2 197.1- I'174"
?rrrliminary; hard on 197I plan I,dlilirrrnl down rnh
?'tl aird on 1'174 plan and wpplrnw'nl.t Inl nrnulion
probler, Soviet deliveries probably will level off
in volume but cost substantially more. East Euro-
peal, inve tments in the exploitation of Soviet
resources dill not begin to pay off until late in
the 19''5s. The East European countries are
likely therefore, to have to plan on rer!uced rates
of _conomic growth during th;. 1976-30
pe? rod.
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Y?'JO.L1via prornu!gatcd it, third pot, ,ir
constitution on February 21 with great pomp and
circumstance but without Presidwnt Tito, who
wr.s reportedly ill with a ''cold." Many of .,rs
countrymen will see his absence as another sign
that they may soon have to get along without
hint.
The constitution is Important to Tito be-
cause it attempts to codify his approach to ruling
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Yurlrr?,I,rvi,r, a110 thus to r'r1"ioe Ihat his political
,uid adni(nr,tr itlve conc'pt', will cor'linut''o (luni-
Irate nalroo,-r Ili(!. II also ?,eck?, It' guar, 'ilt'e Ihc;
-,uIV rval of Yo(pr,l,ina's undue su(:i.1lisi sy',Ieni
after hr, rle,rll-. llnde,r pr(rparatrun for four year,,
(lit tone .111(1 (.implicated do(ollimil ',(+, out Ill
(Icln(I (Ii' tutor' of worker',' ,nl(-nnar,.1ne
un(?i t 111(1 shennihen', ill(' p.1r ly a?, tilt' leading
polrli( ,il lot( e iii the cntuilry.
1114, (oropo',it(oi of the collectrvn 1) 1'si-
(Iercy, the hight'sl level of 'I.iti power, ha', hen'
altered. It will now contain 9 in?,tcad of ;'3 nlenr'
IN'i',. ('('',(Item i Ito will pies-d(( ov'r till-, hcu(Iv
durrrin his life!rnrc hut, upoo ihi dcalli, the po?,(
lion of ( h(ef )f ',tile will rotat' ariortl lh' inner,
bt'P, on an ,annual ha',i',.
I he Yurlu'J iv?. now tact the (len-anrlinq I.1?,k
( , f i r n 1 1 1 e n i n n t i n ( l the cunstitotioo i n ',lane',. I f I Ito
rt'ri,rins phy'ncally 'Ind mentally active, it w(,uld
greatly i,Icilitate the Iii 11 (.4 .', 1111(1 Iiiovi(le fun .-
srinOther han?.rhon Into tilt, pn"t- iIto era. IIr,
iii once from th' llrunitilgahnn ccrc11uiny, how-
ever, (arses anew the question Of how long he can
last. Yugoslav ufhc:rais have told We-,tern ruurn,il-
r',ts Only that his cunenit illrle',', is "nit set roes."
It ns hrgh;y rnil(k''ly, Iiuw,we(, flint n "Ingle cold
would have kept Intro away horn such a signal
evert.
l-1r, absence tngeti- -:r with Iii" sudden d^-
cis;on to postpone s(_hedulc(I hip" to 1-lungary
and Africa---suggests that at minimum he will re-
(tun' an extensive period of rest. Despite the
rernar kable recuperative ability ito has shown in
the past, his age-82 in May-is increasingly
against horn, an(I each bout of illness can be ex-
pected to exact a heavier toll of his ;physical
capacities.
EAST GERMANY: A FIRMER GRIP
Ilie La',t Geonan Gov' nrr('nl", recent de
cr.1on I'r ',hilt I)er,onnel ,uid owl-I! "Iru(.tural
cli,nul.r, Ii file Cuuortl of Milli-,ter', r', nri attenrl-t
to tightitn i!(onmii( ul)ernlmnn',. Ad(lihorial rrr(nr',-
ter,
ial port folio', have Inc,en 0 ,snlnt'd to ',eve(nl (11'p-
lily preriiirs, ao(I the rule', of tI(c State 1'lanrun(l
Comrni',?,ron and Staff, Contract (:ou(t hive ireen
enh,uu:cd, Ili' court Im!" to en?,rne that vok! -
i-,rr"e?, a(1he it to (ontla'itral obligation',
i-.1st Germany frillille(I its 19/3 e(.c,ournc
?.,n, bot poly h^.(:.1n',e of otit"tanlrnrl re',ulI'. in
tl'w 1(''.t half of tilt, year, i he ministerial char,(les
arf Ill pant .n effort to (teal ?,vith the slow(Iown ill
cunoniic (lrowi r,rt the last 11,111 of the yea(,
.'nd in part to (-np('in ....I !.rw', Intended to
',lrengthen the cnitinil of the Lim.-:it of Min"inns
ovel g(,vernrn'nt opoiations.
the chanle?, Involve those ,r tints of the
economy that have been (r tit ve(I at ('cent pIt'-
11urns of the [-,I ,t Gerr-n,nn Ii,uty'', cenhal c(Irr-
niittee. ihU"e sector',, (n( luduig (nve'lnmeris, the
applrcahan of itcn(I" to r(ts'ai(Ii and (Iivt,!upn(eni,
Intl life rnana.1 enn!rt of suppIl", n11(I I.1w I I I,rlirI-
are. crucial to the fulfllicnuvrt of the 19/?1 plan.
f',r'e of the I!+('.(,on,.I '.hif1', (live (mire we-
spor(sibilities to deputy h(eniiel, who had pre-
viously 'xeICI%e(1 no specific ri(nisterial dupes.
Another deputy prt'n-ie' lu'.t his pistil, but renna(n',
a rneniber of the Council of M(n(ste(?, and has
been made deputy chairman of the State Planning
Commission. The Planning Commission now has
three nnenihers Of ministerial tank, reflecting the
governnneiit's decision to strengthen it Ili accord-
ance with a statute passed in August 1973. The
st.,totc charges the commission with supervisinq
the execution of economic and social plans ,,s
well as development of the plans them-
selves.
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I I' ovi(Ir.R(e I?, IIo1( on(.lusive, 1)u1 ,111i(. I1'?,
Ill the Soviet pr(?SS in recent week', indi(:al(.' th,ll
)e(.retary Schlosingor's st,ltelll(!Ilt?, On III(! IlPW U()
largelir g doctrine have added to the controversy
a111nn(1 Soviet ofli(.ials over (Ill! choice', MO,cow
confront!, in the Rational security area, flee out-
corne of this debate coul(I halve a direct effect on
the Soviet position in the. SAL I negotiation!,.
One point of view, uxpresse(1 by Yury Arba-
tov, head of the USA Institute, in the January
issue of the international Communist journal,
/'r?/,lent of !'g'ate an,! So, ralr%in, holds that there
. 110 realistic alternative to negotiated arras 1e-
straint since a continuation of the arms race will
only result in vast expenditures without adding to
the security of either side. According to Arbatov,
the "law" that the cost of every new generation
of weapons increases geometrically ha', produce(
a situation in which defense expen(li'urns are dis-
rupting the normal functioni,lg of a state's cr,)-
nonnic rnechanisnl.
Arbatov also argues that military force can
no longer be used to achieve political objectives.
Ile contends thrt some US in iiLiiy theorists we
hying to find a way out of the strategic impasse
through "rules of the game" that would slake
nuclear war more thinkable by targeting weapons
only against the adversary's military installations.
This revival of US interest in a c(?:_'nterforce strat-
ogy, Arbatov charges, is being used to justify new
wea~)ons pragrarns and a bigger defense budget.
Arbatov maintains that it is unlikely that new
weapons advances will provide either side with
any real advantage, but that a destabilizing effect
can be produced if either believes that its adver-
sary has obtained some advantage.
A somewhat different perspective or. the
arms question is contained in an article in Red
Star on February 14 by Army General Ye. Malt-
sev, who argues that the change in the US attitude
toward the Soviet Union aid the prospects for
peace are based on the military strength of the
USSR. Unlike Arbatov, Ma!+.sev seems to imply
that a bigger US defense budget and the new US
targeting doctrine is a just reason for an increase
in Ili- Soviet dofen',o potential. Maltsev's refer-
ence to the. "topical" nature of maintaining re-
liable SOvl11t dof(!I15(1s ,1l'U Sllgg(1Sts that till! Iss11Q,
he tliscu?,?,rd are contrnversial.
Uefere,e Minister Grechko'?, statenuxlt', on
I ebruary 23, the Soviet Anted I orces Uay, also
can be Interpreted as evidence of a debate in
Moscow about Illture defense allocation',.
Grechko himself did no: seem to come clown
unequivocally on Maher side of the debate. At one
point, Grechko referred to "further strength-
ening" of the USSR's defer!,(: capability, but this
he quickly balanced by asserting that the Soviet
Army and Navy "now have everything necessary
to rout any aggressor." On the whole. Grechko
was riot particularly be!Iicose, and his statements
(lo riot provide evidence that he is at odds with
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SOUTH VIETNAM
MOUE CIIANGCS IN SAIGON
i'Ie,idonl Ihivii h,I?, ol(lelr?d the Ie111omeI1I
of .11 Iea',I ten rIvIlvI,1l'. ,111(1 11a11(Iful Of pluvin(v
chief',, Ino?,1 Of whom Ito ,ulny r.olonels, a', palI
Of Ili, l ullorlt effort t(1 I('VII,l /(! III', govc'111111elll
,'ndWiled out l;(eou petfoIrr WI',, ihieu un(Iouhterlly
sees 11 nerd to 11 (111ce ill(, number of "(![)lot
off,- and r'cu',t of Iho?,o marked for Iclirenr.!rli
have vithor been without (1111m it
ass:e1111t1e1115,
holding Io.',ser pn',iliun?, In the hltleaucla(.y, of
',erving ,r, ,unha'r,adol', .11)1'),1(1. '1111ee of those
101110.rl load ;teen publicly accu',e(i Of corruption.
'Tile retirenlent order is one of it recent series
of steps Ihicu has taken to crack (town oil official
corruption. the f're5idenl has (leclared that the
government intends tO "cleanse" i'Self of wrong-
doers, and he has aul/lolired a stepped-up media
campaign dcnuu11ci111] con option. COi!Icidtrlg with
the goverr;nl(:rtt Icolganiz,ltion last month was the
ouster of one cahinct minister and several police
officials because of their alleged Connections with
gambling and prostitution rings. Moreover, Thieu
reportedly has Iaid down the law to at least two
of his fo(lr military region commanders, telling
their) that the high incidence of corruption in
their area, must be stopped.
"Anti-(?orroption" c,,nlpaigns have been an-
nounced previously by Saigon, but usually with
little lasting effect. Although this latest campaign
could meet the same fate, it has been launched
with much more fanfare and the appearance of a
more genuine effort to get at the root causes.
In addition to reshuffling the cabinet and
giving Prime Minister Khicm added responsibility,
Thieu is streamlining his own office by eliminat-
ing several Special ascictant:' positions, Nnang Duc
Nha, Thieu's former pnvcte secretary who was
just appointed minister of information, has left
the presidential office, but Khiem is still con-
cerned over Nha's influence and activities. Al-
though the Prime Minister says the reorganization
clearly establishes his primacy, he expects that
Nha will continue to have some direct access to
Thieu.
Suulh Vietnam'', V(.ooooly 11,1-, Ill .1
sevol,' ',Ilnnll ful atnlu',i two yell", ,vol uthe toil
look I', for mole of the ',auto' in the rooulIi'. to
come. I-c:onnmic problmrl', ple',enlly pu',o. the
(,Irenlo',t throat to Prc'adenl I h!oil'', otherwise
.,'lend (Ionre',lic pn',iIion, and tilllinued deleliol-
ahun would increase llle risk of pol't.cal irl?,ta-
Hlily. I hicu recognize', this threat, ,111(I many of
111', caltlllet shifts ovel ill(! last Six Itlullth!, have
been attempt' to Ming in Inen who are 1111110
energetic and action-oriented. Still, no clear-cut
ccunomi(: policies have emerged.
Saigon is leaning toward more direct con-
trols, but posscs%es only lirnitc(I financial and
adrnirlistrative tools to deal with short-terITI prob-
lems. With retail price' tit) Gr: percent Over last
year and art additional ',5 percent ',o far this year,
continued declines in real income will almost
surely dvcrea',e the efficiency Of both military
units and civilian programs.
Economic problems--as well as potential
pc'itical difficulties--arc presently concentrat?!d
in urban areas and among people with fixed in-
ColTles. Stagna,ion in indushial production, rapid
inflation, and the sharp reduction in US military
spending have all hit elrban areas the hardest.
Although no data are av:uilable, unemployment is
clearly on the increase; a recent US Embassy
study estimates that unemployment may now on the order of I mitiion people, some 15 percent
of the labor force.
Even for those employed, wages generally
are failing to keep up with the rising cost of
living. This is particularly true of government
employees, both civilian and military, who ac-
count for more than one fifth of the labor force.
Despite a 25-percent pay increase last year, the
real wages of government employees are probably
at best only two thirds that of a year ago.
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I or Inwer level enrplnyee',, (heir regular S~ I
My r 10 10111(1 .1 "('1ie?, of ,pee ,al allowaucr.', as
well a?, (nntnri',',ary ,Ord 1'X privrhtcl,'', will ? .)w
barely (.Over a f,uurly'', expenditroe' for rice.
Mnnnhcihting and the (!ntl)luyruent Of olher
f,nnil, rnenrheIS heist, but Iob?, ,ue Scarce. In aeldi-
trun to Son,,, lay-tiff', by Vietonrne'e manufactur-
er,,, the U5 ',eclor which it it', peak in 1909
directly ?rplnyed ',onre 150,000 Victnalm-w 'Ind
prctb?''. , indirectly provided work fur an ecitraf
nunrl,er (.onlin(re', to redrr,.e errtployntent of
Vietn,tntese.
Agriculture remain', relatively strong, recov-
ering from a (I isappninti rig year in 1972. Real
incomes in this sector hive probably increased
somewhat over the past few years, and there 'we
preliminary indications that a record rice harvest
is now coming in. This performance is unlikely to
be custaine(1, however, because fertilizer is scarce
and fuels are expensive. Llecent increases in r~ce
production have been due almost entirely to
greater use of high-yield varieties, more intensive
use of chemical fertilizers, and increase(] mechani-
zation. The retail price of fertilizer more than
doubled over the past year, however, and another
important input, gasoline, was up more than 200
percent.
Some farmers reportedly are now reverting
to subsistence agriculture, with increased use of
the traditional but lower yielding varieties of rice.
These varieties are hardier and less dependent on
the vagaries of weather and on imported inputs.
With this shift, farmers will probably still be able
to meet their own needs as well as insulate them-
selves somewhat from extarnal market forces, but
private merchan~s or government representatives
may find it more and more difficult to purchase
rice in the delta for shipment to Saigon and other
rice-deficit provinces. Increases in the prices paid
to farmers would eventually lead to greater pro-
duction, but these prices were nearly doubled last
year Another price increase would add to the
burden of low-income urban families or, if the
government attempted to subsidize rice sales, put
added strains on a government budget already
displaying a large deficit.
Wu,ld pace.', (or the cfnwf', laic ha',ed abroad
by Vtetn,ntr ro',e Ur avrnage of 25 lit icerrl la',t
year. Ihu',, it Saiquo were to continue the',anre
vcrlu'?t^ of it', major inrpoit', Ierhliter, rice,
wheat, petrolerrrn prociucI', its 1974 bill cuul(1
tidal well Over ?900 million.
(iecau',e expor I', are expected to he only
about $100 million thi', year, the US Lruha',,y has
regtrc'ste(I an intnrecliatc Supplemental lid appro-
priation of $250 million. I his would be in addi-
tion to the. $500 million the US has provided
annually over the past few years, Which includes
surplus agricultural goods sold under PL-480. Sai-
gon's major source of foreign exchange Other then
foreign aid--US spending in South Viebtant-has
dropped shirply from a peak of $400 million in
1971 to ah,)ut $130 million last year.
Aid from countries other than the US, pri-
marily Japan , d France, will probably continue
to increase, but over the short tern the total
amount will stake only a small dent in Vietnam's
aid and import requirements. Total aid from these
sources will probably amount to somewhat Tess
than $100 million this year, about double that
provided in 1973.
Thus, given the present levels of anticipated
foreign aid for this year, the outlook is for an
economic performance similar to that of
1973-low domestic and foreign investment, little
o: no growth in production, widening income
inequalities, growing unemployment, and con-
tinued deferral of reconstruction and Jevelop-
ment. Moreover, each increase in consumer prices,
with no concomitant gain in money incomes for
the working classes, increases the prospects for
public unrest.
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CAMBODIA: MORE GOVERNMENT GAINS
The government's military fortunes con-
tinued to rise this week as Cambodian Army units
won the upper hand over Khmer Communist
forces south of Phnom Penh. By mru-week, army
troops had ralaken almost all of their previous
holdings on lh-3 south bank of the Prek Thnaot
River, forcimi the Communists to pull their artil-
lery beck out of range of the capital for the first
time in a month. Advancing government troops
discovered five abandoned howitzer positions as
well as significant quantities of ammunition and
supplies.
Norte. vest of Phnom Penh, the Communists
have taken heavy losses in men and material as a
result of a hard drive by government forces. These
setbacks apparently disrupted Communist plans
to launch a series of coordinated moves against
the a ital
Thus far, the only attacks have been
carried out along Route 1 some four miles south-
east of the city. Army commanders have been
able to call in reinforcements from less active
fronts, and appeared to have contained this Com-
munist effort late in the week.
Farther afield, government garrison forces
have ventured forth from the southern provincial
capital ""f Takeo to score minor tactical victories
over understrength insurgent units. Similar suc-
cesses have been reported in the north around
Kompony Cham City.
Teacher-Student Agitation
Phnom Penh's secondary school teachers are
still out on strike over economic grievances, even
though their classroom, have been closed since
late last month. They rave now been joined by
primary school teachers, who have publicly com-
plained that the governmeot had taken their state-
ments oe economic hardships in bad faith by
accusing them of serving communist aims.
In addition to the teachers' statement, the
government was handed a "peace declaration" by
the university students' association-whose recent
activities have had a leftist tinge. Unlike previous
student documents, this one treated both the
government and the Khmer Communists
equally urging both sides to seek peace through
negotiations. i he declaration also stressed prob-
lems of social injustice, suggesting that the stu-
dents may soon shift to exploiting these issues.
The relatively mild tone of the declaration in-
dicates that the government has had some success
in its efforts to undermine and isolate radical
university student leaders.
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LAOS: THE COMMUNISTS' TURN
The next moves in the negotiations to form
a new coalition government apparently are up to
the Lao Communists. Chief Pathet Lao negotiator
Phoun Sipraseuth is due to leave Vientiane, for
Sam Neua soon to report on his political dis-
cussions with Prime Minister Souvanna. Phoun
gave no definite date when he would return to
Vientiane.
For his part, Souvanna is still hopeful that
the coalition will be formed in the near future. At
a press conference late last week marking the first
anniversary of the Laos cease-fire agreement,
Souvanna stated that he expected senior Pathet
Lao official Phoumi Vongvichit to return to Vien-
tiane "very soon" with a definitive list of Com-
munist designees for the new cabinet and its ad-
visory political council.
As the next step in his scenario, Souvanna
said he anticipates meeting Lao Communist leader
Souphanouvong in Luang Prabang to review and
approve the nominees for the new government.
According to Souvanna, he and Souphanou.
vong-accompanied by the entire membership of
the coalition-wuuld then be invested by the
King.
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THAILAND: THE STUDENTS, AGAIN
Bangkok's fractious students never seem to
run out of issues to sustain them in trying to
continue playing a prominent political role. Last
week, three major student organizations staged a
large protest rally, charging that government secu-
rity forces burned a village in the northeast be-
cause the inhabitants were suspected of aiding
Communist insurgents. The students demanded
that the government compensate the villagers and
punish those in the military who were responsible
for the incident. Although Thai officials have
privately admitted that the charges are accurate,
the government has not responded formally to
the students' "unconditional" demands. It has,
however, set up a committee to investigate the
affair.
This is the first time that the students have
focused on an issue involving the military's inter-
ests. If they press their demands, they risk offend-
a military leadership grown impatient over
student agitation.
Under present circumstances, the army lead-
ers probably would not use a move against the
students as a pretext to oust the civilian govern-
ment of Prime Minister Sanva. The army seems to
view its current role solely as one of preserving
order. There is a danger, however, that strong and
effective measures to restrict student political ac-
tivity might lead to a confrontation between the
Page 24
army and the students. Army sensitivities are run- 25X1
ning particularly high at this time because of the
student demonstrations over the military's alleged
involvement in the Village burning incident.
THE "4TH BURMA RIFLES GOVERNMENT" 25X1
The installation of a new government in
Rangoon on March 2 will complete the process of
legitimizing Ne Win', 12-year-old regime as a civil-
ian government. Ne Win assumes the presidency,
and the new administration is a thinly disguised
continuation of the former one.
Ne Win is likely to maintain power indefi-
nitely-a prospect that offers i?ttle promise for
the easing of Burma's staggering economic prob-
lems. Twelve years of mismanagement have re-
duced Burma, once the world's leading rice ex-
porter, to the point where ii is unable to meet its
now modest export commitments. Effective secu-
rity controls have stifled discontent and pre-
vented coalescence of an opposition.
Ne Win's final step in assuming the presi-
dency was preceded by the proclamation of a
socialist republic on January 2-the 26th anniver-
sary of Burmese independence-an act that for-
malized Burma's homespun socialism. In a De-
cember plebiscite, Burmese voters ratified a new
socialist constitution by a 95-percent majority
amid government surveillance, widespread viola-
tion of the secret ballot principle, and fraudulent
tabulation of votes by local authorities eager to
produce massive affirmative majorities.
Under the new constitution, political activ-
ity remains the preserve of the regime's monopoly
party, the Burma Socialist Program Party. Candi-
date lists for the 451-member People's Assembly
c ted over the past several weeks were drawn up
uy the party executive committee. Rangoon
cynics have dubbed Ne Win's new regime the "4th
Burma Rifles Government," from the fact that
ten of the seventeen cabinet members were com-
rades of Ne Win in his old military unit. Although
Ne Win and most of his cronies shed their military
titles some time ago, they have continued in con- 25X1
25X1
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CHILE: AT HOME AND ABROAD
The retirement of two senior generals and
the maneuvering over the composition of a key
governmental advisory group reflect junta Presi-
dent Pinochet's determination to prevent the
emergence of potential rivals for power.
Army Chief of Staff Urbina, although posing
no threat to Pinochet, was apparently retired be-
cause his conduct under the previous regime had
earned him the mistrust of his peers. The other
retired officer, General Manuel Torres, apparently
clashed with the junta president over government
policy once too often. Pinochet reportedly has
had disagreements with other ambitious generals as
well. He apparently feels his position is now
firmly enough established for him to deal force-
fully with such problems, and further changes in
the high command may be in the works.
Pinochet and the rest of the government are
not concerned exclusively with the mechanics of
power, however. In Paris, a meeting between
Chile and its major creditors last week resulted in
the rescheduling of all but $150 million of some
$650 million in payments due this year. The draft
agreement calls for payments of 5 percent of the
rescheduled debt this year, 5 percent in 1975, 10
percent in 1976, and the remainder over the fol-
lowing seven years. Another meeting will be held
in late March to approve the draft.
At the UN this week, Chile was busy defend-
ing itself against an impassioned attack by the
widow of the late President Allende, and Ambas-
sador Bazan continued his tireless efforts to save
Chile's place in the nonaligned group. The latest
threat to this position is Santiago's decision-
which Bazan is vigorously trying to reverse-to
allow a Chilean team to play South Africa in a
Davis Cup tennis match.
Chile's major foreign concern continues to
be Peru. Lima's purchase of tanks from the USSR
and its acceptance of Soviet training personnel are
compounding Chile's concern over traditional
Peruvian revanchism. Santiago newspapers, in
what is probably a government-inspired campaign,
have been warning Chileans of ar alleged Soviet-
Cuban plan to use Peru as th ' new "bridge for
Marxism" in the hemisphere. Chilean officials pri-
vately have expressed the fear that Chilean exiles
will accompany the Peruvians across the border
and attempt to establish a rival government on
captured Chilean soil.
Plausible or not, such a scenario is not far-
fetched to the Chilean military. Moves aimed at
deterring the Peruvians include the reinforcement
of ground and air forces in the north, plans for
weapons acquisitions, and efforts to attract. for-
eign investment to the border area. The Chileans
also are looking for foreign political support.
Pinochet plans to attend Brazilian President-elect
Geisel's inauguration in March, and reportedly
will seek a commitment for Brazilian assistance in
countering a Peruvian attack. Pinochet may also
attempt some face-to-face fence-mending with
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Bolivian President Banzer, who may also be at the
Geisel inauguration. Chile might try to mitigate
Bolivian revanchism and drive a wedge between
Bolivia and Peru by offering La Paz more conces-
sions on access to the sea through Chilean ports
that once belonged to Peru.
The rebellion by police in the provincial
capitals of Cordoba and Mendoza may give Presi-
dent Peron the excuse he has been seeking to oust
the left-leaning governments of these provinces.
Indeed, Peronist officials in Buenos Aires may
have instigated the disturbances to justify federal
intervention.
Workers and politicie -s in both provinces,
but particularly in Cordoba, are lining up behind
left- and right-wing Peronist leaders. According to
press reports, leftists in Cordoba are calling on
workers to "maintain a state of alert" and to
"depend" the governor and his aides, who were
seized by the police. Rightists are appealing for
public support to depose the "Marxist clique"
that is governing the province.
The governors of several provinces have been
under heavy fire from conservative government
and labor leaders in Buenos Aires since Peron's
call for a purge of left-wingers last October. Peron
has singled out Cordc*a as a center of leftist
infection, making it clear that he would like to
remove Marxists and Trotskyites from key gov-
ernment and labor posts there. The trade union
movement in Cordoba is dominated by radical left-
ists, many of them well-armed and violently
opposed to the Peronist labor bureaucracy in the
capital.
There have been conflicting reports concern-
ing Peron's immediatr plans for ousting the gover-
nors. He recently assured a gathering of provincial
Pedetal police ready to move
Because Cordoba is such a leftist stronghold,
authorities have long expected that the governor
and his administration would not go down with-
out a fight. Whether Peron had a hand in creating
the crisis or not, it is an opportunity he will find
hard to resist. If he decides to intervene with
troops, he will have full support from the armed
forces, whose leaders are eager to settle old scores
with radical leftists there. Some federal police
already have been sent to Cordoba, and III Army
Corps headquarters there has put its units on full
alert. Peron may allow the situation to deteriorate
a bit more before moving but, once he does, a
violent confrontation is almost inevitable.
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25X1
25X1
25X1
25X1
GUATEMALA: PRESIDENTIAL ELECTIONS
The governing coalition candidate, General
Kjell Laugerud, has the best chance of winning
what is expected to be a close presidential elec-
tion on March 3. Laugerud's c]mp,rigrr managers,
led by President Carlos Arana, appear reasonably
confident that he will win a plurality or at least
come close enough to permit them to rig the
results without being too obvious.
Laugerud's chief opponent is General Efrain
Rios of the leftist National Opposition Front. The
other contender is Colonel Ernesto Paiz of the
centrist Revolutionary Party. If, as seems likely,
no candidate wins a majority, the election goes to
the Congress, which must then elect one of the
top two vote-getters. On two occasions in the
recent past, Congress picked the front-runner, but
this is not mandatory. Should Laug^rud come in a
close second, there would be considerable pres-
sure on the government-controlled legislature to
Rios supporters, if they believed
victory was stolen from him by fraud would try
to promoto protest demonstrations, and an un-
stable situation could develop. The army, though
its top brass is opposed to Rios, gives every indi-
cation that it wants no part of a blatantly fraudu-
lent election. A Paiz victory would probably not
be opposed by either Laugerud or Rios sup-
porters.
Recently, in the estimation of the US L:nrbassy,
Rios has slipped somewhat, due to internal party
squabbling and a weak grass-roots campaign. I lis
best showing will be in Guatemala City, which
accounts for 25 percent of the total vote. Rios'
hopes were also dampened by Colonel Enrique
Peralta's recent decision riot to support hill)
openly. Instead, the popular former chief of state
freed his followers to make their own decisions.
Peralta is said to be privately urging his supporters
to vote for Rios, but since they represent a wide
range of views they will probably not vote in a
bloc for any single candidate. In addition, Rios
may be hurt by a last-minute government slur
campaign, branding his National Opposition
Front as communist and insinuating that the
Christian Democrat Party, which is a member of
the Front, is under foreign influence.
Paiz has quietly improved his chances in the
last several weeks by campaigning effectively in
the interior, where he now appears able to beat
Rios, and possibly pass Laugerud. He will still
have to make heavy gains in the capital to finish
second, however.
Inflation is the only significant issue, and
Rios has made some gains exploiting A. Violence
is not the explosive issue it was in 1970, although
government gunmen have murdered some local
opposition politicians.
wins and is denied his victory.
The Communist Party is urging its members
and sympathizers to vote for Rios, but is not
publicly assisting the Rios campaign. The party
decided several weeks ago not to initiate violence
over the next few weeks for fear of giving the
government a pretext to cancel the election and
to retaliate in kind. Violence could break out
after election day, however, especially if Rios 25X1
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JIIfIgII IfI Iron, the II,11,11 111upagamla rrlra?,rs,
Arnlyd I 1111 e?, Mi1)r,lrr tL11Il (.a?,h0 a( ( nnlplisllerl
little rrf ,1 ?,uh?,tnntive n,ilnrr' dlnnlg Ill-, rrrent
till)', 10 the (J')')i and (:;r'( h11?JOVakia III YugO?
?,I,,vi,1, however, Ili', c IIII-day ?,tay ntllkr'd a high
1)011)1 in Ihr ?,Ir .itlily i1)Iplr)ving I('1a1Iuns br'lwr(,n
I Iavana .111(1 I lelgt adv.
Up0n nrriv,ll in Mu5cow Ott I ehl(I,lry (r, I4111l
was (liven Only .1 lukewarrtl Im 1,I)hnn In .spite Of
the fact that th(, visit wa', in "Irsponse to .111
invitation frOn1 the Cl'SU." After 1 bnir?f i(.Icnowl-
e(Igenlent Of Ill-, ill Iivll, the Soviet pie's', ( oared
no (Iertails of his visit and ignored his departure
for I'rarlue five (lays later. When he ar r ivrd )lain
in Moscow on I ebluary 20 in tr,mr,it hone I'rlqur
to flelgrade, the Soviet press 111,1(1e no mention Of
his Ctechosiovak sojourn, leaving the impression
that he had been in the IISSR for the previous
two weeks.
The reasons for Ran I's trip to Moscow, th,i
low-level reception conlrnittee, and perfunctory
press treatment are unclear. Although the trip was
classified as "unofficial" in both the Cuban and
Soviet press, an individual of Ratil's rank he is
also party second secretary and first vice prime
minister would seem to call for more attention
from his hosts. Moreover, those accompanying
Raul also received short shrift. His wife, who is
head of the Cuban Women's Federation, Vice
P me Minister Flavio flravo, Cuba's represenla-
trv' to the sixth meeting of the CLMA Executive
Committee, and Vice Minister of Interior Jose
Abrantes, got little or no mention.
The signing of the Soviet-Cuban trade pro-
tocol for 1974 in January would seem to preclude
(,( On)Ili i( tn,ltt'rs a?, fhr sulrlrv I Of it,irrl'?, bilk',
With fill, "(wi)ts, .111(l Ow vi?,il (if I ('unid Ilrr; I)11,v
In (:uba jOSI pr 1111 to i4atri'?, fill) shOUld have
nhvralerl II1r nerd for 1114Ihrn 41)141111 al (If-,( 11?,?,11 n.
It scans mist likely, iheteIOre, lh,il 14,1111 was in
Mr)"( uw 111 111.1kr. a pit( 11 for )-our nlihtary a?,?,r?,I?
,1111 rv. II 1111?, i?, Irur, 111e plaving down Of III,, visit
ug(lesls Ihal Mu?,r.0w cithrr 11u11r(I a )leaf rat if)
;n?, 1 1(4111',I OI I?, (It?I.!Irninrd 10 rlr,.r,rn1)ha,t,e ,iny
new .11 11), sI)il)nlrnt?,.
CiecIao'lov.k heallnenl Of (0)11'?, till) visas
only slightly better than 111,rt Of the S,)viels, ile
W.V. (liven priority attention upon ,arrival 111(1 (ir-
parture, but his activities while in C;echosJov,lkia
were given sparse coverage. Ilk visit was again
(hlracleriied "unnffi( ial" 11)(1, accoIdIII(I to
Ilav,)u1 at least, resrllte(1 from ,11) invitation bon)
Czechoslovak Defense Minister D;ur, who 11,1(1
visited Cuba last year.
In conh,st, the Yugoslav portion of the Itii),
described as "official," received broad pie?,s
coverage in both 1-lavana mid 13elgr??de. 1-6trl
traveled widely throughout the country, met with
many top leaders, and was given red carpet treat-
ment. Although no specifics were revealed, one of
the matters discussed involved "further develop-
ment of cooperation between the armed forces of
the two countries." Until last year, when a
gradual warming trend began to develop, Cuban-
Yugoslav relations had been cool. Raul'', visit,
however, indicates that whatever major problems
existed between the two countries have been
largely overcome and that ties are well on the
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