WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000040004-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 27
• Document Creation Date: December 22, 2016
• Document Release Date: May 1, 2009
• Sequence Number: 4
• Publication Date: March 22, 1974
• Content Type: REPORT

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-11)6c? c/Gcl,'
Weekly Review
State Dept. review completed.
DIA review
completed.
LOAN COPY'
Aetlurn to DSB
I0l 107, Hq.
Top Secret
C2.j/aS3 25X1
Top Secret
Copy N2 426
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The WLLKLY REVIEW, issued every Friday morning by the
Office of Current Intelligence, reports and analyzes significant
developments of the week through noon on Thursday. It
frequently includes material coordinated with or prepared by
the Office of Economic Resear:h, the Office of Strategic
Research and the Directorate of Science and Technology.
Topic, requiring more comprehensive treatment and therefore
published separately as Special Reports are listed in the
contents.
EAST ASIA
PACIFIC
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 Arabs Turn on Oil Valve
3 Europeans Unsure of US Aims
4 Israel-Syria
Cambodia: 01 Setbacks
and Sihanouk
for Coalition
Philippines-Malaysia: Muslim Rebels
12 Brezhnev Speaks on Agriculture
13 Yugoslavia: Trieste Again
14 Italy: Rumor Tries Again
15 Prague Girds Against the West
17 South Africa: Bantustan Independence
18 Iraq-Kurds: Time is Running Out
19 Pakistan: Clouds on the Horizon
20 India: Grim Economic Prospects
21 Venezuela: Tc rorism Comeback
22 Peron Looks Eastward
23 Chile: Bolivia Ties
24 Guatemala: Onward With Laugerud
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Arabs Z"ur# On Oil Valve
%rab oil should start flowing toward the US
soon. The amount immediately available will re-
store a major part of the Oil received from Arab
sources before shipments to the US were em-
bargoed last October during the Middle East war.
After the announcement on March 18 of the
Arab decision to lift the embargo, Saudi Arabian
Oil Minister Yamani told newsmen that his coun-
try's production will be increased immediately by
more than 1 million barrels per day. Most of the
increase, he said, will go to the US. If Saudi
output does go up by that amount, production
will be about at the level that prevailed last Sep-
tember.
Production can be increased immediately,
and there is substantial tanker tonnage available
in the Persian Gulf. The normal transit time be-
tween the gulf and the US is 35-40 days. Furthei-
more, a small number of tankers en route to other
destinations may be diverted to the US. Addi-
tional supplies could begin to reach the consumer
even sooner, because refiners and distributors
may be more willing to draw down stocks in
anticipation of greater crude oil supplies.
The increase in production should exert fur-
ther downward pressure on crude prices. The full
impact will depend on the extent to which US oil
consumption increases in response to the lifting
of Arab restrictions. Auctions by producer gov-
ernments in recent weeks have brought lower
offers than the governments had expected.
The refusal of Iraq, Libya, and Syria to join
in ending the embargo will have little effect on
world oil supplies. Iraq never did cut production
and did not participate in the meetings of Arab
oil ministers in Tripoli and Vienna at which the
embargo was ended. Libyan production is only
about 200,000 barrels per clay below its Septem-
ber level. Prior to the embargo, the US received
about 350,000 barrels per day from Libya. Syria,
a minor producer, does not export oil to the US.
The agreement announced in Vienna also
provides for increased amounts of oil for Italy
and West Germany, and for individual members
to increase production to the level necessary to
implement the various decisions. Yamani said,
however, that the embargo on the Netherlands
would not be lifted.
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The announcement by the Arab oil ministers
followed a decision on March 17 by the 12-nation
Organization of Petroleum Exporting Countries
to maintain current posted prices during the next
quarter. OPEC's decision was a compromise be-
tween Saudi Arabia, which had hoped to lower
prices, and Algeria and Libya, which had pressed
for still higher prices.
None of the Vienna agreements were easily
reached, primarily because the oil-producing
countries are away that any substantial increase
in production must ultimately lead to lower
prices. Although current Arab production is only
88 percent of the September 1973 level, world
crude prices have been softening for several weeks
as adjustments to the earlier price hikes curbed
demand.
The Arabs' inclusion of a provision for a
review on June 1 of the decision to lift the
embargo against the US means they have not
foreclosed use of oil as a political weapon in the
future. The Egyptians and the Saudis, however,
had concluded that the time had come to make a
gesture of recognition to the US for its diplomatic
efforts that led to disengagement on the Egyp-
tian-Israeli front and to encourage Washington to
press ahead in working toward a comprehensive
settlement. They worked hard for a united front
on this stand, but finally failed to bring along the
Syrians and Libyans. The hard-lining Algerians
were persuaded to go along with the majority, but
apparently only after some tough bargaining. The
Algerians had earlier argued for the review
proviso, and its inclusion in the agreement was
probably at their insistence.
Egypt's failure to achieve unanimity was a
setback for President Sadat, although not an
unexpected one; he has tried to minimize the
importance of Arab differences. Cairo's authorita-
tive Middle East News Agency went to some
lengths to play down the dissenting positions of
Syria and Libya.
Damascus has sal nothing
pu icy. rest ent Asad almost certainly believes
"And this valve controls the Dow Jones averages."
that the move has hurt Syria's negotiating posi-
tion, just as he believes his interests were damaged
by Egypt's earlier decisions to exchange POWs
and to agree to a disengagement of forces in the
Sinai. If no progress is made on a separation of
forces agreement on the Golan front, Asad will 25X1
probably press Saud; Arabia and Egypt to reim-
pose the embargo in June. In the meantime,
Throughout the debate among the Arab oil
ministers, the Libyans apparently avoided ob-
structionist tactics in an effort to preserve their
uneasy rapprochement with the Egyptians and
the Saudis. Syria's firm opposition, however, pro-
vided the Libyans with a convenient justification
for finally rejecting the majority decision. Al-
though sharply critical of the announcement from
Vienna, Tripoli has focused its objections on the
timing of the decision rather than on the issues;
by thus qualifying its dissent, Tripoli has left
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Europeans Unsure of US Aims
The governments of the nine EC members
have reacted publicly with restraint to recent ex-
pressions of US displeasure-including the Presi-
dent's criticism in Chicago last week-with the
inadequacy of political consultations between the
Nine and the US.
Several of France's partners have acknowl-
edged the need to consult more fully with Wash-
ington on pending community political decisions.
There are, nevertheless, no signs that agreement
among the Nine on a procedure for such consul-
tations mill be any easier to find now than during
the lengthy discussions leading to the framing of
the draft US-EC declaration that did not meet US
requirements. Rather than encouraging France's
partners to isolate Paris on the issue of relations
with the US, the trans-Atlantic tensions seem to
have increased their wariness of an open con-
frontation with Paris.
The problem of reconciling the wish of most
of the Nine to preserve close ties with the US
with their intention of preserving the integrity of
a "European" decision-making process is not
made easier by the shaky position in which many
of the community governments find thtrnselves
today. The Labor government in Britain is taking
pains to disavow any "struggle against America,"
but London's decision to try to negotiate better
terms for UK membership in the EC-rather than
'.hreatening to withdraw-implies an intention to
stick with its EC partners, including France. Al-
though the Nine are unlikely soon to agree on any
new suggestions for improving US-European
consultations, Chancellor Brandt is reportedly
drafting a reply to the US-after talks with the
other EC members-in order to keep a dialogue
open.
President Nixon's remarks in Houston this
week, reaffirming his personal opposition to any
unilateral US withdrawal of troops from Europe,
have generally been greeted in Europe as a concili-
atory gesture and a move to relax the charged
trans-Atlantic atmosphere. But even if they are
now less inclined to term the US stand an ultima-
tum, European commentators still perceive Wash-
ington's position as a challenge to Western Eu-
rope. Conciliatory sounds from both Washington
and Paris, it is recognized, have not changed the
substance of the debate.
Moreover, there has already been some Euro-
pean comment alleging a US "carrot and stick"
approach to Europe. Such allegations reflect a
lingering uncertainty over what the US specifi-
cally wants, short of becoming a de facto member
of the community. There are still suspicions that
the US requires an impossible choice be made
between European unity and ties to the US.
France, for its part, may now be as inter-
ested in keeping trans-Atlantic quarreling within
bounds as any of its EC partners, since to do
otherwise would undermine Paris' aim of demon-
strating that all the Europeans are in the same
boat vis-a-vis the US. There are signs that the
French may in fact welcome a breather from
US-European polemics in order to launch a series
of proposals ostensibly aimed at reinvigorating
mover,ent toward European unity. With the EC
under pressure from the outFide, its traditional
decision-making processes stagnating, and leader-
ship from the other members lacking, Paris may
hope-by making apparent concessions to Euro-
pean solidarity-to have a better chance of
shaping European institutions more to its liking.
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Israel-Syria
The Golan Front
Clashes of increasing intensity occurred daily
this week between Israeli and Syrian forces on the
Golan front. Both sides have admitted casualties
in the exchanges, which have lasted as long as
nine hours and have involved machine-gun,
mortar, rocket, tank, and artillery fire.
Official Israeli statements have reflected con-
cern over the growing level of hostilities, but
overall, the comment has been relatively moder-
ate.
Measured Step Toward Negotiations
Despite the artillery exchanges on the Golan
Heights this week, Syria and Israel moved a step
closer to negotiations on a sLparation of forces.
Tel Aviv announced that Minister of Defense
Dayan will come to Washington on March 29 to
handle the next exchange of proposals on disen-
gagement. Damascus has reportedly named
Brigadier General Hikmat Shihabi, chief of mili-
tary intelligence, as its delegate to the talks, but
he is unlikely to come to Washington while Dayan
is in town. Secretary Kissinger will act as inter-
mediary and is expected to meet with both
parties separately after his return from Moscow
late next week.
In contrast to Dayan, General Shihabi is
little known outside the Arab world. He has
served as a negotiator before, however, and is said
to be highly regarded by President Asad. Last
June, for example, Shihabi was in charge of the
talks that resulted in the reopening of the Syrian-
Lebanese border. In addition to his intelligence
duties, he is a member of the important Baath
Party Military Committee and of the Syrian
Army's Political Bureau. Shihabi speaks fluent
Russian and English as well as some French.
Speaking in Tel Aviv on March 18, Dayan called
Syria's present terms for a disengagement "totally
unacceptable," perhaps referring to Syria's re-
ported calls for an Israeli withdrawal from the
Golan Heights.
Dayan claimed that Moscow was not doing
all it could to bring peace to the area and that the
Soviets had the power to press Damascus into
moderating its stand.
The disposition of the town of al-Qunay-
tirah, which Israeli forces captured in 1967, may
determine how much progress is made during the
first phase of negoti;it;ons. Prime Minister Meir
has repeatedly insisted that her government will
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not "reward" Syria for its surprise attack last
October by handing back territory captured in
1967. The Syrians have been just as adamant
about regaining at least some land lost then, in-
cluding aI-Qunaytirah. The town, once an im-
portant administrative center in the area and the
largest town on the Golan Heights, has acquired
considerable symbolic importance to the Syrians,
and especially to Asad, who is still under pressure
at home to demonstrate that negotiations with
Israel are worthwhile.
The Israelis, in a long-planned move, are
moving their two newest and largest missile patrol
boats from the Mediterranean to the Red Sea.
The deputy commander of the Israeli Navy in-
formed the US naval attache in Tel Aviv that the
boats were scheduled to reach South Africa late
last week. They were expected to remain in port
at Capetown for several days before continuing
their 12,000-mile voyvge to Sharm-ash-Shayk on
the southern tip of the Sinai.
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CAMBODIA: SETBACKS AND SIHANOUK
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The Khmer Communists this week dealt the compromise with American imperialism... if not
by capturing Oudong. Late in the week, a
700-man Cambodian Army force was still holding
on just outside Oudong, but insurgent troops had
burned almost the entire town and hail led off a
large number of its 20,000 inhabitants. Govern-
ment relief columns working theii- way toward
Oudong from the north and east were stalled by
stiff resistance.
Although Oudong has littlc tactical im-
portance, it is a recently created piovi n.ial capital
and a former royal capital with religious znd
historical significance. Its capture on the anniver-
sary of Sihanuuk's overthrow provides the Com-
munists with a much-needed victory to offset
their recent poor showing i;, the Phnom Pe
In the far southwest, fighting has picked up
around the isolated coastal city of Kampot, but
government defenders there have held their
ground. Reinforcements and supplies continue to
arrive by air and sea, and government strength has
grown to over 3,600. The Communists, who are
proceeding cautiously, recently used 120-mm.
mortars at Kampot. This is the first time the big
mortars, which were part of recent North Vietna-
mese arms deliveries, have been used in the war.
On the international front, Communist rep-
resentatives have renewed their tough line on
negotiations. Sihanouk himself, during a brief
visit to the Pathet Lao headquarters in Sam Neua
last week, took the opportunity to reject any new
possibility of talks with the Lon No' government.
He repeated the familiar line that any negotia-
tions would have to be between his "government"
and Washington. The Prince also lashed out at
"bigger and stronger" countries, almost certtlinly
China and the Soviet Union, which "prefer to
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Skillful political maneuvering by Prime Min-
ister Souvanna appears to have significantly weak-
c- :d resistance to his :fforts to form a new coali-
tion government.
With his own letter of resignation in his
pocket, Souvanna last weekend headed for Luang
Prai,ang to seek reaffirmation of the King's sup-
port for his plan to form the coalition by direct
royal investiture without prior ratification by the
National Assembly. Although it is not yet certain
that the King, a strict constitutionalist, un-
equivocally approved Souvanna's plan, he did
endorse the Prime Minister's recommendation
against the corn ocation of a special assembly
session. A majority of deputies in the rightist-
oriented legislature had demanded such a session
to debate the constitutionality of Souvanna's
proposed method of forming the new govern-
ment.
Communist forces in the central highlands
last weekend initiated some of the heaviest fight-
ing since the cease-fire. Their attacks, directed
against several government outposts near Kontum
City, probably were in retaliation for government
efforts to block an eastward expansion of the
Communist logistics corridor. The South Viet-
namese 62nd and 95th Ranger battalions, posi-
tioned northeast of Kontum City, have been at-
tempting to disrupt Communist efforts to con-
nect a new road with an existing one.
Over 100 government Rangers, who had
been missing for three days, reported on March
20 that up to half of the troops of the two
government units may have been killed, including
the commander and deputy of the 95th Battalion.
To the south in Military Region 3, govern-
ment officials believe that the Communists may
be preparing for new military action before the
end of the month. The South Vietnamese antic-
ipate some form of reprisal for the successful
government operation during February in the Ho
Bo Woods in Rinh Duong Province as well as
against other security operations in the region.
COSVN on
March 5 banned all civilian activities along a road
cnnnecting Tay Ninh and Birih Duong provinces
because of Communist military traffic. In addi-
tion, ralliers reported in early March that a
medical unit has been moved into the forward
area of the border provinces northwest of Saigon
and additional food supplies are being sent there
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Philippines-Malaysia
MORE WORDS OVER MUSLIM REBELS
Manila and Kuala Lumpur apparently are
building toward another war of words over
alleged Malaysian support for Philippine Muslim
rebels. President Marcos and his military advisers
charge that outside military support channeled to
Muslims through the Malaysian Borneo state of
Sabah is a key factor enabling the rebels to resist
armed forces efforts to end the fighting.
Philippine officials have raised charges of
Malaysian support to Muslim insurgents at various
times in the past. In early 1973, Marcos created a
diplomatic uproar that seemed to threaten the
cohesion of the Association of Southeast Asian
Nations-Malaysia, Singapore, Indonesia, Thai-
land, and the Philippines. Marcos now believes
that he has much better evidence of Malaysian
involvement in the form of testimony by cap-
tured rebels, who claim they were trained in Ma-
laysia. The detainees reportedly assert that they
were trained by persons they believed to be Ma-
laysian military ofticers and that they were trans-
ported in Malaysian military aircraft.
Manila began the latest round by leaking to
foreign journalists a story that it has proof that
Malaysia is supplying arms and ammunition to the
rebels. Philippine officials have shown some of
this "evidence" to Saudi Arabian Foreign Minister
-Jaggaf, who visited Manila last week, anL1 to the
US ambassador. Philippine officials also alluded
to Malaysian involvement during a briefing of
foreign ambassadors held in early March.
Marcos probably hopes his campaign to pre-
sent the Philippines as the aggrieved party will
serve a dual purpose. Other Southeast Asian
states, principally Indonesia, may be persuaded in
the interests of regional harmony to press Kuala
Lumpur to curb support from Sabah to the
rebels. In addition, Marcos hopes to discredit
Malaysia in the eyes of other Islamic states, par-
ticularly Arab oil producers, and thus undercut
Malaysian agitation against Manila's treatment of
its Muslim minority.
Marcos is combining his anti-Malaysia cam-
paign with a skillful cultivation of certain Middle
East states, such as Saudi Arabia. He seeks to
convince them that he is making an honest effort
to settle. the Muslim problem but that outside
interference makes this extremely difficult.
Marcos obviously has his eye on the Islamic for-
eign ministers' conference scheduled for Kuala
Lumpur in May.
If Kuala Lumpur and Manila beqin trading
charges over the Muslims, Jakarta will
Interrogating Muslim prisoners
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undoubtedly be drawn in because of its concern
over the implications for regional stability and
cooperation. Jakarta may ';ry to revive the tripar-
tite tali:s held in Hong Kong during 1973. At that
time, Indonesia tried to act as an honest broker to
settle the long-standing Philippine-Malaysian feud,
but the talks broke down because neither side was
prepared to compromise.
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Speaking at the 20th anniversary of the start
of Khrushchev's New Lands program, Soviet
party leader Brezhnev unveiled a land-improve-
ment program for the Russian Republic aimed at
leveling off the large fluctuations in Soviet agri-
cultural output. He also spoke of the need to
modernize and simplify agriculture's organiza-
tional structure. Indicating that agriculture is a
top-priority sector, he warned that "national eco-
nomic problems" must not tempt a diversion of
resources from the farms.
Brezhnev revealed that 35 billion rubles
would be spent during 1976-30 in the first phase
of a 15-year project to develop agriculture in the
non-black soil region of the Russian Republic.
This sum is equal to a fourth of planned agricul-
tural investment during the current Five Year
Plan. The new program will include traditional
land-reclamation projects-irrigation and drain-
age-as well as increased supplies of mineral ferti-
lizer and other agricultural chemicals. The plan
covers 124 million acres, 79 million of which are
arable and the rest useful for grazing. The crop
area represents about 15 percent of total sown
acreage and is about equal to the 70 million acres
plowed up in the New Lands of Kazakhstan and
Siberia.
Although the non-black soil area has large
tracts of boggy, uneven land, it has a high annual
precipitation and responds well to the application
of lime and mineral fertilizer. The Brezhnev agri-
cultural programs of 1965 and 1970 got good
results by providing more chemicals for this area,
which has furnished more than one third of the
increase in grain output in recent years. The new
program is feasible only because the Soviets have
been successful in boosting their output of
mineral fertilizer.
On the other hand, the Soviets do not have a
good record in implementing land-reclamation
programs, however, and the Brezhnev plan is un-
likely to work out as announced. In recent years,
the amount of land that slipped into disuse ex-
ceeds additions of newly reclaimed land. In any
case, major benefits from the new program will
not be realized before 1980.
Brezhnev's speech also hinted that some agri-
cultural reorganization may take place in the near
future. He noted that the Central Committee is
now looking over suggestions for improvements
from the grass roots. He endorsed such local-level
experiments as agro-industrial and inter-farm or-
ganizations, but warned that "hasty, artificial
nudging and exertion of pressure" will not be
tolerated. On the national level, he stated that the
present structure of management has become
over-complicated. Brezhnev called for "a unified
approach" to all agricultural questions for the
country as a whole and better coordination
among the departments concerned with agricul-
ture. At the same time, he stressed that central-
ized planned guidance must be balanced with
operational independence for state and collective
farms. These proposals echo in many ways the
reorganization scheme currently under way in the
industrial sector, namely, the creation of large,
integrated production units at the local level and
a streamlining at the national level.
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YUGOSLAVIA: TRIESTE AGAIN
The current dispute between Belgrade and
Rome over jurisdiction in the "Zone B" corridor
south of Trieste will probably continue to be
noisy for some time. Tito is not expected to alter
Yugoslavia's long-held position, especially since
his other neighbors could raise similar irredentist
claims. He undoubtedly believes that maintaining
a firm stand will help to ease this burden for his
successors.
Zone B came under Yugoslav administration
under the terms of the Allied peace treaty with
Italy in 1947 and of the London memorandum of
understanding in 1954. Although Yugoslavia and
Italy are both signatories to the London docu-
ments, they have not signed any bilateral agree-
ments on the border. Since the end of World War
11, Italian rightists-who are particularly strong in
the Trieste area-have blocked Rome's efforts to
meet Belgrade's demands for official Italian recog.
nition of Yugoslav jurisdiction over Zone B. In
recent years, however, the Italians have been able
to give Belgrade private assurances that no re-
newed claims would be made.
Rome apparently broke this pattern with an
unpublicized note in mid-January which reas-
serted Italian claims to the territory and protested
Yugoslavia's posting of border signs in Zone B.
Rome was apparently prompted to formalize its
protest after Belgrade failed to respond to an oral
request for an explanation. The request was
triggered by parliamentary pressure from the neo-
fascists. The government probably wanted to
avoid neo-fascist grandstanding at a time when
public confidence is at a low point due to the
recent cabinet crisis and a major oil pay-off scan-
dal. Although this note was subsequently recalled,
Rome renewed its claim with another protest on
March 11. Belgrade then made the quarrel public
by issuing its own diplomatic protest and opening
up the propaganda vents.
Italian diplomats claim that Rome wants to
soften the polemics by officially expressing its
desire for good relations, but without fully with-
drawing its territorial claim. Belgrade will prob-
ably reject this because it leaves the Italian claim
on the public record. As Rome prepared its next
move, the Yugoslav Government strongly
denounced the Italian position on March 20. Bel-
grade put the onus on Italy for "crushing" good
bilateral relations and warned that Yugoslavia
"knows how to defend its territory."
For Tito, the problems posed by the Zone B
controversy extend well beyond Italian-Yugoslav
relations. Irredentism is an unpleasant backdrop
to his efforts to ensure a smooth succession, and
Tito almost certainly believes that he cannot ac-
cept Rome's renewed claims to Zone B without
inviting similar problems from Bulgaria. Al-
though the Bulgarians do not make any direct
claims on Yugoslav territory, Sofia steadfastly
asserts that citizens of Yugoslavia's Macedonian
Republic are Bulgarian by nationality. The Yugo-
slavs have recently been extremely defensive
about the Bulgarian position, which has also prob-
ably undercut an improvement in bilateral rela-
tions.
J ZON$ A
J J Triest
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ITALY: RUMOR TRIES AGAIN
Prince Minister Rumor's new center-left gov-
ernment will probably survive a forthcoming vote
of confidence in parliament. The odds, however,
are against the coalition enduring much beyond
the national referendum on the legalized divorce
bill, scheduled for May 12.
The speed with which Rumor was able to
put the government back together after its dis-
solution on March 2 indicates that the coalition
partners merely papered over long-standing dif-
ferences. With tho divorce campaign already heat-
ing up, the parties were reluctant to embark on
the long negotiations usually required to formu-
late a program and reshuffle cabinet portfolios.
As a result, the new government looks and
sounds very much like the old one. The major
difference is that the Republican Party, which
triggered the crisis by withdrawing from the gov-
ernment after failing to resolve a dispute with the
Socialists over economic policy, has refused to
accept cabinet posts. The Republicans are limiting
their participation to support in parliament for a
cabinet made up of the remaining three center-
left parties--Christian Democrats, Socialists, and
Social Democrats.
The new government has echoed its pred-
ecessor's pledge to give top priority to the fight
against inflation and problems related to the
energy shortage. Substantial progress is unlikely,
however, since the dispute aver how to achieve
these goals remains unresolved.
There is already widespread talk of a new
political "stocktaking" after the divorce refer-
endum. Ir- the meantime, the campaign leading up
to the referendum will probably have first call on
political energies. The referendum will either con-
firm or abrogate a 1970 law that legalized
divorce, but most politicians are playing for
higher stakes.
Those who favor legalized divorce--including
all of the political parties except the Christian
Democrats and neo-fascists-will portray the
referendum as a challenge by the Catholic Church
Rumor's dilernnur -aNo solution ahead
to individual civil rights. This alignment of forces
will isolate the Christian Democrats from their
coalition partners and allow the Communists to
accuse the Christian Democrats of collusion with
the neo-fascists. The Communists, who were
stunned by the neo-fascists' electoral gains in the
early 1970s, will conduct their campaign as an
anti-fascist crust ,;e.
Many politicians think that the referendum
has turned into a personal battle between the
leaders of the country's two major parties -
Christian Democrat Amintore Fanfani and Com-
munist Enrico Berlinguer. Berlinguer, in a bid for
a Communist role in the national government, has
been arguing that the time is ripe for a rapproche-
ment with the Christian Democrats. He thus tried
to get Fanfa;ii to go along with a plan to cancel
the referendum in order to avoid an open battle
between the two parties. Fanfani's refusal to co-
operate, however, has given substance to the con-
cerns of more militant Communists who doubt
the wisdom of Berlinguer s call for a modus
vivendi with the Christian Democrats. Even the
Soviets have chided Berlinguer for falling into a
trap set by Fanfani.
In this atmosphere, it will be difficult for the
Communists to adopt once again the moderate
line that gave Rumor's previous government an
extended breathing spell. The Communists still
hope for an eventual deal with the Christian
Democrats but, for the moment, the party line is
one of "intransigent" opposition to Rumor's
fragile coalition.
25X1
25X1
Pige
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Page 15
must move effectively to immunize or get rid of
those in key positions who might be susceptible
to Western influences so that any increase in
East-West contacts does not make the infection
worse.
In the effort to counter the Western position
on free movement, the Czechoslovak press has
recently given much space to restating and de-
fending the party line on the European security
talks. The media have noted that Prague favors
cultural exchanges but cannot permit "deliberate
attempts" by forces in the West-including Radio
Free Europe's "hostile and anti-socialist propa-
ganda"-to undermine Czechoslovak sovereignty,
laws, and customs. One recent article also charged
that Washington was tying the extension of Amer-
ican credits to the acceptance of propagandistic
US films and cultural programs.
The leadership's rather formalistic approach
to the campaign for ideological discipline is not
likely to reduce the attractiveness of Western
values among all segments of the pof:ulation,
especially the youth and dissident writers. The
decision to conduct the cadre review will, how-
ever, drive home the message to all party rram-
bers that detente cannot mean a relaxation in
Czechoslovak political life.
Prague's growing attention to ideological dis-
cipline reflects the domestic political danger: that
the regime secs in detente, Czechoslovak media
have stopped up their attacks on Western propo-
sals for freer movement and on the corruptive
nature of Western ideas and values. In addition,
the regime has begun a "complex cadre assess-
ment," that is, a review of the ideological and
professional credentials of all personnel holding
responsible positions in the party and state bu-
reaucracy. These moves are clearly designed to
serve notice on all segments of the population
that detente will not be allowed to erode the
party's control.
Prague is evidently attempting to respond to
Soviet calls for strict conformity throughout East-
ern Europe. In many respects, however, detente
poses a unique problem to the Czechoslovak lead-
ership. Unlike most other East Europc?n regimes,
authorities in Prague must contend with a popula-
tion that still cherishes Western democratic tradi-
tions and has fresh memories of Dubcek's "social-
ism with a human face." The leadership feels it
Czechoslovak youth-Western influence
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PORTUGAL: SUPPORTING THE RIGHT
The short-lived military revolt last week re-
vealed dissent within the military over Portugal's
African policy and may have weakened Pri:ne
Minister Cactano's position.
By agreeing earlier to the dismissal of Gener-
al; Costa Gomes and Spinola, Prime Minister Cae-
tano has increased his dependence on the ultra-
right wing of the Portuguese establishment-an
element he has never been popular with in the
past. They forced him to back down before when
he tried to modify Portuguese African policy,
maintaining that any relaxation would lead to the
loss of the ove:seas possessions. The ultra-right
faction includes President Thomaz, the forty
wealthiest families, and some high-ranking mili-
tary officers. It is especially annoyed because
Caetano permitted the publication of Spinola's
book, and it probably will continue to suspect the
Prime Minister of wanting to create a federation
of Portugal and its overseas provinces.
The right wing may have been behind the
refusal of Portuguese censors to allow publication
at home of Cactano's statement to a French news
weekly that he would not resign, although other
portions of his interview were carried. President
Thomaz's reluctance to prolong the present crisis
by firing the Prime Minister may protect Caetano
for the time being.
The sporadic military alerts of the past week
have been lifted, but military and government
officials are concerned about the extent of dissent
over the firing of Costa Gomes and Spinola.
Neither general appears to have been directly in-
volved in the revolt by sonic 200 officers and
men, but the march on Lisbon belies the declara-
tions of loyalty given last week by other senior
military officers just before the public announce-
ment of the dismissals.
Other signs of defiance were evident last
week when the alumni association of Lisbon Mili-
tary College awarded decorations to the two dis-
missed generals and to Lt. Colonel Joao Bruno, a
close associate of Spinola and a hero of action in
Portuguese Guinea. In addition, both generals
were elected to top offices in the alumni associa-
tion.
The government is treating the two generals
with caution. Both are free to conic and go in
Lisboa. Gcoeral Spinola's book urging a federa-
tion with the African provinces-which set off the
furor that led to the dismissals-is now being
permitted to be sold in Lisbon bookshops.
The government has, however, arrested Lt.
Colonel Bruno along with some 30 other officers.
According to press reports quoting informed mili-
tary sources, the general commanding the Lisbon
military academy and an admiral who is the naval
secretary of the Armed Forces Defense Staff have
been dismissed in the aftermath cf the abortive
revolt.
The regime may succeed in stilling dissent
within the armed forces and censoring public dis-
cussion of overseas policy, but in so doing it only
postpon's the day of reckoning over its efforts to
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Transkei, the oldest of the self-governing
tribal homelands--t3antustans---croatnd within
South Africa, may soon request independence.
Prime Minister Vorster apparently has encouraged
the move in order to show South African whites,
who go to the polls next month, that the Bantus-
tan program is working out to their advantage. It
is doubtful, however, that the remaining -tribal
homelands could be brought to accept independ-
ence without concessions by Pretoria that would
provoke serious white opposition.
South Africa's white rulers developed the
Bantustan program in the early 1960s to justify
their policy of rigid apartheid-racial separation.
An eventual transition to independent status has
been a feature of the program from its inception,
although Pretoria expects the f3antustans to re-
main completely dependent. satellites.
Transkei has had an autonomous administra-
tion since 1963. At its recent annual congress, the
territory's loading political party resolved to
South Africa: Bantustans
f. Basotho Qwa Owe
Bophuthatswana
I Ciskei
_?I Ciazankulu
Kwazulu
Lebowa
i Swazi'
Tranakel
Venda
Umtata' Z''-
V e41?da.
E ~~:i(1~utu
e'rolected 0
Ndcheleland 4-
tiomeland d
tiOD
aka
Ciskei
East London.'
*Not yet sell governing
Page 17 WEEKLY REVIEW
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request independence within the next five years,
Last week, Transkei's chief minister, Kaiser
Matanzima, introduced an independence resolu-
tion in the Transkei legislative assembly.
In a private conversation with the US consul
general in Durban, Matanzima stated that inde-
pendence could come within two years. He em-
phasized, however, that before his government
would accept independence, Pretoria must turn
over a small Indian Ocean seaport and other land
parcels that havv been tentatively promised. Ma-
tanzima had previously asserted that Transkei
would not accept independence until Pretoria
ceded much more extensive territories that orig-
inally belonged to the Transkei's Xhosa tribe.
At the party congress, Matanzima reportedly
argued that Pretoria would increase its financial
aid to Transkei after independence because Prime
Minister Vorster wants the first independent Ban-
tustan to become a "showcase," both to induce
leaders of other Bantustans to request independ-
ence, and to gain international approval for the
Bantustan program. These arguments apparently
won over party members who had wanted to hold
out until Transkei's maximum land claims were
met. Matanzima's hope of greater financial aid
from Pretoria may be unrealistic, but Vorster is
believed to have assured him that modest terri-
torial claims would be readily granted is part of
an independence settlement.
Matanzima's willingness to go forward on
this basis with the implementation of the Bantus-
tan program will be politically helpful to Prime
Minister Vorster. With national elections sched-
uled for April 24, he is especially eager to show
white voters that he can mollify the Bantustan
le-)ders with concessions that are far short of the
sweeping demands they put Furth in a manifesto
last November.
Early independence for Transkei would riot
necessarily hasten independence for the other
seven homelands that now have some degree of
self-government, but it could spur the demands of
the leaders of the other Bantustans for consolida-
tion of their fragmented territories. Transkei is
the only Bantustan that has a consolidated terri-
torial base, and leaders of other homelands have a
greater need than Matanzima to insist on major
land transfers before independence. Although Pre-
toria has plans for a partial and very gradual
consolidation of other Bantustans, actual land
transfers have barely begun. The Vorstor govern-
ment is proceeding cautiously in order to mini-
mize its financial burden and, more important,
the opposition of white farmers who have to
move from any lands transferred to the home-
lands.
Iraq's troubles with its Kurdish minority
could soon erupt into serious fighting. Baghdad
has given the Kurds until March 26 to accept its
plan for limited autonomy. Kurdish leader Bar-
zani has already rejected the plan publicly, and
last week Kurdish forces seized several Irani garri-
sons near the Turkish border. Although there
have been rumors of attempts to re-open. talks
between the two sides, no progress appears to
have been made in resolving the impasse.
Meanwhile, both sides are continuing mili-
tary preparations. The government may first try
to establish a puppet government in the Kurdish
area. Such a government is likely to be opposed
strongly by most Kurds, however, and if the gov-
ernment ultimately feels compelled to resort to
ground and air attacks, the badly outnumbered
and outgunned Kurdish rebels will be forced to
relinquish population centers and take up new
positions in the mountains where the terrain
would be to their advantage.
For several weeks now, many Kurds have
been fleeing to the north, either to join the armed
rebels or to seek refuge. These refugees could
become a serious problem for the Kurds if the
government decides to impose an economic
blockade of the area, making it difficult to ac-
quire clothing, food, and shelter.
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PAKISTAN: CLOUDS ON THE HORIZON
Prime Minister Bhutto's personal prestige is
currently at an all-time high, largely as a result of
the public relations dividends he gained from the
Islamic summit conference in Lahore last month.
Recent deveinpinents in the Punjab and Baluchi-
stan, however, could eventually cause problems
for him and his ruling Pakistan People's Party.
Earlier this month, Mustafa Khar was re-
placed as chief minister of Punjab Province by
Mohammed Haneef Ramay, a move that in effect
reversed the power positions of the two diverse
political forces on which Bhutto's party is based
in the Punjab. Ramay, born in Lahore, represents
the urban elite that is committed to social, eco-
nomic, and land reform. Khar's support has come
mainly from the rural and conservative elements
of the province Although Khar reportedly will
not challenge Ramay and the urban elite's present
control of the party apparatus, his supporters
may not go along with him. In that event, the
internal cohosion of the prov;ncial party organiza-
tion could face a serious test.
In Baluchistan Province, the plans of the
People's Party for ending the governmo,ital
instability and tribal dissidence that have long
ti ibled the area could be upset by the party's
heavy-handed methods of strengthening its posi-
tion. Several members of the provincial assembly,
who belong to the National Awami Party, the
main opposition group, were recently jailed or
forced into hiding and their seats declared vacant.
By-elections for the vacated seats were boycotted
by the National Awami Party, which charged that
the government would manipulate thr' results in
order to ensure the election of People's Party
candidates. The boycott apparently has given the
People's Party enough seats to establish firm con-
trol over the provincial government, but at the
cost of increasing the frustration and anger of the
opposition.
Prime Minister Bhirtt?o, for his part, is
attempting to undercut the role of the traditional
leaders of the Baluchi and Pathan tribes by
imposing administrative changes in the province
from Islamabad. These tribal leaders have gen-
erally supported the opposition.
In addition, the recent murder of an opposi-
tion politician in Baluchistan may cause further
trouble for Bhutto's party. The deputy speaker of
the provincial assembly, who was also a Pathan
leader, was found dead on March 13. If his death
can be traced to the People's Party, other Pathan
leaders and politicians in the province will be
under strong pressure from their constituents to
avenge the killing or risk losing popular support.
In that event, Baluchistan could become still
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The outlook this year for the depressed
Indian economy is grim. Inflation, stagnating
industrial production and smaller-than-planned
increases in agricultural output continue to be
major problems. Chronic trade imbalances are
increasing because of soaring import costs-
especially for food grains, potroleum, and forti-
lizer-and slow export growth. The pro5pocts for
obtaining new foreign aid remain uncertain.
Inflation is India's major economic problem,
with the rate of inflation climbing to record levels
in 1973. At the end of December, wholesale
prices were 26 porcen, ';:ghor than a year earlier.
The principal cause of inflation-deficit financing
of government expenditures--continues unabated.
Slow industrial and agricultural growth also con-
tinue to constrain supplies, which remain only
slightly ahead of population increases.
The budget for the fiscal year beginning
April 1 virtually ignores the inflation problem.
Expenditures are scheduled to increase 16 percent
to $11,7 billion and the deficit is project, -d to
move up 33 percent to $160 million. The ac.ual
deficit last year was ten times that estimated, and
this year it is again likely to be significantly
greater than anticipated in the budget.
Industrial production stagnated in 1973.
Hampered by energy shortages, trarspoi t bottle-
necks, raw material shortages, labor strife, and
reduced demand for capi'cal goods, there is little
chance of recovery this year. In addition to
recurring electric power deficiencies and coal
shortages, petroleum is now in short supply. India
imports 70 percent of its petroleum supplies.
Increased domestic oil production hinges on the
long-term success of exploratory drilling now
under way offshore from Bomb y. Renewed
attention is now being given to coal, which has
long been neglected despite sizable reserves. New
Delhi's efforts to counter energy shortages by
cranking up domestic coal production and
increasing petroleum exploration will take time.
For the immediate future, energy shortages will
confinuu to hamper industrial production.
Agi ultural production has recovered from
List year's Wsmal performance and food grab,,
p1 eduction pruuably will increase about 10
percent to 105 million t, s in the crop year
ending June 30, 1974. ',t put is still 10 million
tons below planned levels, however, because of
bad weather, crop disease, and fertilizer shortages.
Grain stocks and indigenous government procure-
mrnt efforts will oo inadequate to maintain the
government's food grain distribution system until
the fall harvest. Nearly 2 million tons of grain
imports, already contracted for this year, are
being delivered. More will be needed but high
prices will curb sizable purchases for some time,
unless New Delhi can obtain concessionary terms
from sellers.
Although exports increased about 20 per-
cent in 1973, impo, is increased 45 percent,
creating abcut a $150-million trade deficit. New
Delhi received virtually no new net private foreign
investment and had to use foreign exchange
reserves and borrow $75 million from the Inter-
national Monetary Fund to pay its bills. In 1974,
the deficit will increase as import costs continue
to rise.
Import priorities have not yet been sorted
out, but it is unlikely that imports will be
dequate to accelerate production. Higher petro-
leurn and fertilizer prices in 1974 will cost India
an additional $1 billion, the equivalent of one
third of its export earnings. India'_ $1.1 billion
International Monetary Fund quota and another
$1.1 billion in foreign exchange reserves are
available, but Ne'~, !,eini is hesitant to draw down
reserves or to go deeply into debt to the fund.
The Free World Aid India Consortium will meet
in June to consider new foreign aid. Most donors
have been cautious, however, and the chances of
India obtaining sharply increased aid are not
good.
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VENEZUELA: TERRORISM COMEBACK
Lilt-wnig extleniisl', at(: followirl(i thimiglt
l)n Illnu decla,ahnll llf war against Ills new Itrc',i-
ifiiit, (,,111(1', /\11(11(!', II(:,1!/, ,111(1 Ili', t)t!Itiut.i itii
A(.Iioii adlllllll',hatio ti, Claillllll(f 10 be uih1,In gtl(!r-
IIII,)', I,elungillg Iii the Otltlawud Ii,Inc.lul,l Iloja ,nicl
(1111111 (.el(I (11(1,1111/AlOnS, the exliCliii',, (1',',111110(1
(It' hit I'll the lash of .u son ,Ind hunihings as well
.1', a 11,1nk ll)hhely 111,11 r?onicided with fain/'
In,lu(lul.ltiun.
l)itneslic is well ,is US-Owned huSine',ses in
"(welal Uene/tiela,l (:Ill(!" . were tillg(!t' Of the t(l-
IIli 1"t,, will) Set fines that (Ieslruye(I six sbuctt.res
if the l,nsle',t wal(hcluse complex in (itacas and
(I,Iinage(I d Illgll?1lse .111,1(frllcllt building ill the
lily'', c('olcl. lu ,I(I(Illlull, bl)nlhs were Ioun(I In a
US-ow, ed depalbrlcilt store and In the of frees l)f
a U`, u1I conipatiy, Attempts tl) put out tite wale.
hou'.e hl.11'e th(' worst In :;.Ir,r,..:?,' hlstuly wclc
hanlpcic(I for .1 Itnie by snll;crs s,lonling 'loll) .1
n.'ai by low.( 0',1 housing pt olrc l ,it f n l'In('n ,Illd
N,lllorl,ll gu.ll(I Ind .11111 Il ill' )', writ
fnl,illy r,lllr(I in Io 1r',loi.' o1(it'i,
I lu' g?v,'1o11.'11l'', rt',II II1111 th'r', I,II has been
relallvcly low key Ioleoul Mllllsler Luis f'nletna
Ulrla/ It,l', hccn tu(Jrrly the rncdi.l, p,i11n( ul.rily 1111'
x'osaUinatrsl l.ihloid bless, nut to give the ex-
Ircnust', the publicity they .nc sectung. In his first
press cunfe,ence, Ptesldenl Pclet lepealc(I the
.rclni ilition, characlerl,rlig the letlotlsnl as (lie
work Of .1 few with no pulrtrc,il hackrn,. fit the
same time, Perez warned that he would gl/e no
(fuai ter to clamping dawn o:t fur tiler outbursts.
Guvernrticnt officials Ii lieVe that the guerrillas
hruc to provoke i IC,JressiVe counter-teaction
from the new yovernntent that would unite the
now-divided leftist forces In the counhy and at
the same l:ntc Will publicity for then moribund
Ot ganizahons.
Lacking the men, the organization, and the
fOleign support they ter:erved during the full-scale
armed insurgency in the 1960s. the tettotists have
nothing to gain but innihilatiorn by Openly baiting
Page 21
W irelmme rninpl('-, hh/c%
Aft 11,111st 1ll'1,0Ii
the Pore/ adnunrsitaton. Lvcn the Icf t(sl p ii tital
pal ties, rticluduul the nr,lrxist Movenlt'nt to So.
ciahsnl, have publicly dissociated themselves front
.hc extremists, if fact .tcknnwledged by President
Pete; when he absolved the legally established
leftist parties of any connection with the terror
fists.
Although some of the nicrctentc could be the
w,Irk of common ciintntals, there is little doubt
that the level of guerrilla violence, as well as the
announcements by groups claiming to be guer-
rillas, has increased In recent clays. Although the
extremists ire not capable of shaking the stability
of the government, they can manage sc. t!crcd
acts of violence, which will probably curttinuc lot
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PERON LOOKS EASTWARD
In an attempt to retain I3ue.ios Aires'
inr;qper,dent outlook in international olations,
Juan Peron is seeking to expand AI Jontina's
economic relations with the Communist world.
Several Communist rations have ?espondod by
agreeing to extend substantial amounts of long-
term aid to Buenos Aires,.
Romanian President C,ausoscu, during his
visit to Argentina in e,lrly March, signed a
$100-million credit agreement. The credits, the
largest by 13i harost to a South American coun-
try, cover aid for agricultural, mining, and petro-
flncnnt Economic Agreements with
Communist Countries
Janunry?Morch 1974
onto Type of Agreement
( r?,' '.I , ,d id I I. Of V I 1'rnt,i 11 un r.lr,rnlhn, I
1v unnnrn 1 ulgn?r,Uum
Ih,111 rr unnnrn '11'd Ir, 'I
r.n?nr
{`, ..,r l 11,11 I. d 1'1 ulu? 111 nn, 111.111, lr nrl
.'11g1?n rl, r 1 it X1111. I I , , , I1
11'Ivu,11y Ilr I.un.1?ntnru ran ?., u'1r111n
b, Ion d,, ,'p .11 : unpu r l?:~~n
I , Irru,uy .'. r.l,uirina II,ar.l,~ rl ,i~pr,?
nu.r,I
I rPu111r !11{ I r. nrr,d .nprrnu?nI Inc
~rnq '1.1111 in
.,..1?11111{
iv~pr Ir f r ~;
Arlo.'wo of un . r.. pu. 1.1111 11
n It. ,upn unlu',I1y lu,bl
A, it r, ,, , ii l nn ..,q? 1,1111 I
rrr 1 mmq
C?.rli1 ,nprrnuul Iru j,ll)(1
niillu!r1
Aq 11.111,?111 un Iuur',1
r t.r 111.1, 11-11
I I`,: ,Ir 1 chi u,ny 17 A,1rr1?nu?np un rt omit,"
.wd r , rnnnrn 1,11 r mgw ,llnm
f lihr u,it y I'
1 t rill t r i l l , I
CrV1111 ,u rr't ,,b'Irl 111 ?,ullrly
ul m1, Ioony ,1111) rrlugnnr1II
Nlro-nu'I on ?,i t ti lu
Ir1 lu.u.,11 Imp.r,1 W m
lown development. A $37-million contract for
Romanian oil-drilling equipment has already been
signed.
In mid-February, the USSR and Buenos
Aires concluded a series of economic agreements
that included credits, but the amount of aid was
not fixed. Soviet financial assistance was offered
for steel, petroleum, forestry, transport, power
generation, and maritime industries. Soviet
technicians already are considering a proposal to
assist in the construction of a deep-water Dort in
Patagonia, and Moscow is hoping to provide
power-generating equipment for the prestigious
Salto Grande hydroelectric project. Although
Argentina has not yet accepted the Soviet bid or
$65 million, which is below the lowest Western
bid, Moscow sweetened the offer with $10 mil-
lion of cred,"s to defray local construction and
installation costs.
Recent economic agreements with other
Communist nations include the provision of
credits by Czechoslovakia for power-generating
equipment and the eventual establishment of a
joint company to produce power equipment for
tale in Argentina and elsewhere in Latin America.
Poland has pledged assistance to Argentina's
fishing, shipbuilding, and mining sectors, while
Hungary currently is drafting a cooperation agree-
ment for bauxite development and a plant to
manufacture port equipment.
Argentina's plans for industrial diversifica-
tion mesh with Communist desires to reduce the
deficit in their Argentine trade, which has
averaged more than $50 million annually over the
past three years. Peron, faced with $2 billion in
debt-service payments to Western creditors
through 1976, may view Communist long-term
aid, repayable in goods, as a viable alternative to
increased Western assistance. This merger of
interests should lead to an eventual increase in the 25X1
exchange of goods, technical and scientific in-
formation, and possibly personnel.
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Chilean junta chief Pinochet and Bolivian
President Banzor agreed Iasi week to appoint a
binational commission that will attempt to
resolve major differences as a prelude to the
renewal of diplomatic relations and economic
cooperation. The commission will begin secret
meetings in Uruguay within the next two months.
The major stumbling block to an agreement
could be Bolivian insistence on obtaining an out-
let to the sea through Chile. The two nations
broke relations more than a decade ago during a
dispute over the use of common water resources.
Even before that, however, ties had been strained
for almost a century because of Bolivia's claims to
territory on the Pacific coast conquered by Chile
during the War of the Pacific.
The cordial meeting of the presidents was
arranged by Brazilian officials during the inaugu-
ration festivities in Brasilia. The new Geisel
administration undoubtedly sees several benefits
in improved relations:
? both military regimes would be strength-
ened;
? even partial reconciliation would earn
Brazil prestige as an international arbiter,
since the two leaders met for the first time on
Brazilian soil;
? a possible Chilean concession to Bolivia
on access to the sea might involve internation-
alization of a port in northern Chile, a devel-
opment that Brazil views as an opportunity
for economic gain and increased influence.
A series of regional trade agreements is
reportedly being discussed at Chile's suggestion.
Chile is concerned about Peruvian revanchism and
is anxious to attract foreign investment to its
northern border region, and the junta probably
believes that a Brazilian economic stake in the
area would help discourage Peruvian incursions.
Pronouncements made on March 11 to mark
six months of government by the armed forces
and carabrneros strongly reiterated their deter-
mination to restructure Chile's political, eco-
nomic, and social systems before allowing a
return to civilian rule.
The statements outlined plans for the crea-
tion of a "social democracy" free of the partisan
politics of the past. The military and police
intend to eschew reliance on any organized polit-
ical group. Instead, they will attempt to create
their own base of mass popular support through a
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highly structured chain of command extending
from the junta to neighborhood councils. Par-
ticipation will be compulsory.
Junta President Pinochet emphasized the
regime's sympathy with the low-income groups
that are bearing the brunt of the economic
recovery program. Although he acknowledged
that further privations lie ahead, he promised that
"the same generation will reap the fruits of these
sacrifices." Pinochet also noted that new taxes
will spread the burden more evenly and warned
"those who seek only their own profits and
ignore their social duties" that drastic penalties
will be imposed for violations of economic regula-
tions.
Christian Democratic Party patriarch
Eduardo Frei was the only living ex-president not
present to hear Pinochet's speech. He had planned
to attend but changed his mind following publica-
tion of the junta's paper on social development, a
portion of which strongly attacked his party. Frei
was not appeased by a private message from
Pinochet turned down Frei's request for a public
presidential disavowal, but the press Sater carried
a disclaimer from the junta.
The Christian Democrats appear to have
taken the incident philosophically, but they
remain con:erned over the machinations of those
with a vested interest in bringing about an open
break between the party and the junta
The Guatemalan Government, which seems
to have stifled opposition to the disputed count
in the election on March 3, is preparing to build a
presidential image for General Kjell Laugerud,
who is slated to assume office on July 1.
Guatemalans generally believe that Lauge-
rud's election was engineered by gross fraud, but
the opposition's attempts to thwart a Laugerud
victory by peaceful resistance have been ineffec-
tive. Appeals by defeated candidate General
Efrain Rios Montt for nationwide strikes have
gone unanswered, and street demonstrations have
been easily broken up by police. The army has
been uneasy over the situation, but its top gen-
erals now appear to be backing the government,
and coup rumors have subsided.
Rios' principal supporters in the left-of-
center National Opposition Front are still urging
the public to reject the "imposition of Lauge-
rud," but these efforts are likely to have little
effect now that the Front is I aaderless.
Meanwhile, the government reportedly is
working to ensure that Laugerud will have a
friendly congress to deal with.
As in the presidential contest, Rios'
party outpolled the coalition and legitimately
wc..n the largest number of deputy seats.F_
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