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October 25, 1974
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Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 25X1 Weekly Review Copy N 649 25X1 25X1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Thr- WEEKLY REVIEW, issued every Friday morning by the Office of Curreni Intelligence, reports and analyzes significant developments of the week through noon on Thur3day. It frequently includes material coordinated with or prepared by the Office of Economic Research, the Office of Strategic Research, and the Directorate of Science and Technology. Topics requiring more comprehensive treatment and therefore published separately as 1~pecl3l Reports are listed in the contents. CONTENTS (October 25, 1974) MIDDLE EAST AFRICA 14 Pakistan-Afghanistan: Still Hostile 15 Iran-Iraq: Impasse Continues WESTERN HEMISPHERE 16 Canada: Planning Defense Cuts 17 Colombia: Corrective Action 18 Chile: Another Close Call 18 Paraguay: Democratic Dictatorship 19 Cuba: Mixing Oil and Politics EAST ASIA PACIFIC 20 Cambodia: Seeking a UN Seat 21 New Zealand: Election Rumors Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 1 Egypt-USSR: Mending Fences 2 Arab League: Crucial Summit 4 Japan: Anti-US Demonstrations 5 Italy: Fanfani's Last iry 6 Western Europe: F-104 Replacement 6 Cyprus: Settlement No Closer 8 France: Troubled Waters 9 Portugal: Electoral Wheels Turn 10 West Germany: Summit 13 European Communism: Pablum in Warsaw Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Egypt-USSR: Mending Fences Foreign Minister Fahmi's visit to Moscow last week succeeded in taking the chill out of Soviet-Egyptian relations. but further progress toward resolving the serious differences between the two sides is unlikely before President Sadat and General SecrPfer; Brezhnev meet in January. Brezhnev's pledge to go to Cairo is being touted as a political victory by the Egyptians, and it is clearly a major signal that the Soviets are now in a more accommodating mood. Nevertheless, the pledge does not appear to have been accompanied by any Soviet agreement to respond quickly to the substantial economic and military shopping list Fahrrii reportedly took with him to Moscow. The reluctance of both Moscow and Cairo to make fundamental concessions it this time was reflected in the omission of the customary final communique and in the differing interpretations of the visit appearing in Soviet and Egyptian public statements. The two sides did issue a state- ment on the Palestinian question that affirmed the Palestinians' right to a "national entity" and endorsed the attendance of the Palestine Libera- tion Organization at the Geneva conference "in an independent capacity and on an equal footing" with other participants. The separate versions of this statement issued by Moscow and Cairo, how- ever, differed in that the Soviets attached more urgency to reconvening the Geneva talks. Euphoria in Cairo... The visit and the announcement of the Brezhnev-Sadat summit have brought forth ef- fusive praise for Moscow from the Cairo press. It has heaped gratitude on the Soviets for helping Egypt "in some cf the gravest moments of its history." At the same time, however, the Egyp- tians have lost no opportunity to affirm their continued invention to maintain foreign and domestic policies independent of the Soviets. Whatever unresolved problems remain from the :=ahmi visit, the Egyptians see Soviet acquiescence in a Cairo summit as a vindication of Sadat's refusal to bow to Soviet pressures. The editor of the leading Cairo daily, Al- Ahram, wrote that Moscow now understands Egypt has "the right" to deal with the US, agrees that Cairo must coordinate Arab strategy before rushing to reconvene the Geneva conference, and accepts the `act that the Egyptian economic liberalization program, to which the Soviets have objected during the past year, is a purely domes- tic affair. Although the editor may be overstating Soviet "understanding," he claimed that Mos- cow's acceptance of the Egyptian viewpoint came after a "simple calculation": Egypt is indis- putably the key to the Middle East, and "it is impossible to go over Egypt's head if any solution to any problem in the area is desired." The message that all super power dealings in the Middle East must go through Egypt undoubt- edly is intended for US as well as Soviet ears. Cairo has little fear of US interference in Egyp- tian affairs but it probably sees the rapproche- ment with Moscow as helpful in pressing the US toward further r,iovement both in peace negotia- tions and in economic assistance for Egypt. In addition to playing up Soviet agreement on the summit as a triumph of Egyptian Page 1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 diplomacy, Cairo media have waxed euphoric over the alleged economic results of the Fahmi visit. The press is claiming that the Soviets agreed in principle to supply a nuclear reactor, to nego- tiate a new trade protocol, and to reduce and reschedule payment of the enormous Egyptian military debt to tha USSR. Prior to the visit, the Soviets did offer to study some of Egypt's eco- nomic proposals, and the Egyptian foreign trade minister announced this week that implementa- tion of a five-year trade agreement will begin in 1976. He did not say when the agreement will be signed, and the editor of Al-Ahrcm has told US embassy officials in Cairo privately that he knows of no concrete results on economic or military subjects emerging from the ministerial discussions that took place in Moscow. Earlier this month, the Soviet charge in Cairo said Moscow would eventually fulfill its outstanding arms commitments to Egypt, but that new agreements would have to await an Egyptian-Soviet summit. Now that such a meeting is scheduled, it is possible that the Soviets may pave the way for Brezhnev's visit by accelerating the pace of the arms deliveries under contracts concluded prior to the October war. ...and Caution in Moscow Like the Egyptians, the Soviets have been putting the best face on the Fahmi visit and, although Soviet propaganda continues indirect criticism of Sadat's policies, Brezhnev's agreement to go to Cairo affirms Soviet unwillingness to risk an open break with the Egyptian leader. Until now, Breznnev has resisted going because such a visit might appear to endorse the improved rela- tions betweer, Egypt and the US. Brezhnev, who has not visited the Middle East since becoming party chief, Ws also been chary of directly engaging his prestige with Moscow's sometimes troubled dealings with the Arabs. In a rece~rt speech, however, he said contacts with Arab leaders "are especially necessary and useful at this time," and he has appar"ntly come to believe that a personal meeting can ease some of the disagree- ment between Moscow and Cairo. By setting a date for a Brezhnev visit, the Soviets may feel they have succeeded in throwing responsibility for further improvment of the relationship back on Sadat. Moscow certainly will be watching carefully for signs that he is willing to take Soviat interests into account as he moves through both the Arab summit that starts in Rabat this weekend and the next round of Middle East talks with Secretary Kissinger. In his farewell remarks to Fahmi, Gromyko said pointedly that Cairo must do its part to make Brezhnev's visit a success and-in an apparent reference to Secretary Kissinger-warned that Moscow and Cairo must not let "any person" create obstacles to an 25X1 2 Arab League: Crucial Summit The Arab summit meeting that convenes or. October 26 in Rabat will play a critical part in determining where the Arabs go next in peace negotiations with Israel. The question of how to accommodate both Jordan and the Palestine Liberation Organization in peace talks will occupy the major portion of the Arab leaders' attention. The principal participants may also discuss the relative merits of o step-by-step approach to a peace settlement versus moving immediately to a resumption of plenary sessions of the Geneva conference. On either question, a hard-line stance by the more radical Arab regimes could tie the hands of the moderates and seri- ously hamper further progress toward a settle- ment. Egyptian President Sadat, who has been in the forefront of the attempt to reconcile Jorda- nian-PLO differences, will take the lead on this issue at Rabat. What Sadat wants from the sum- mit is, in essence, Arab recognition of Jordan's Page 2 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 role as negotiator for the West Bank, as well as a symbolic elevation of the PLO's status that will give the organization something approaching equal status with the front-line states and provide the Palestinians at least a long-range hope of obtaining satisfaction from the negotiating process. The task of winning Arab acceptance of Jordan's role will be delicate and will probably involve some maneuvering with words. For example, although the PLO was satisfied to obtain a UN resolution designating the organiza- tion as "representative" of the Palestinian people, it is doubtful that it would accept a similarly limited designation from an Arab forum. The PLO might, however, be satisfied with a summit resolution that avoided spelling out explicitly its "representivity." This could be accomplished by simply referring to last year's Algiers summit resolution on the PLO, without specifying that this was the resolution that initially designated the group as the "sole legitimate" representative of the Palestinian people. The PLO and its supporters among the Arab states could interpret this as reaffirming the uniqueness of its representative role. At the same time, Jordan and Egypt would not be en- cumbered by a commitment to the limiting adjectives, and Jordan could proceed with an implicit Arab commitment not to oppose its right to negotiate. The danger to Sadat's strategy is less that the PLO itself will remain rigid in opposing a role for Jordan than that its supporters-Algeria, Kuwait, Iraq, and even Syria-will outdo themselves in seeking to accommodate the Palestinians. If the PLO is led to believe that the Arabs will not acquiesce in Amman's negotiating role, it is likely to push for explicit recognition as "sole represent- ative," with all this would imply for Jordan's exclusion from the peace talks. On the questions of whether to proceed with negotiations by stages and of what those stages should be, Egypt will probably try for a vaguely worded formulation in the summit's resolution or skirt the issue entirely. Some of the other Arabs, particularly Syria, may nevertheless be unwilling to let the issue ride in this manner. President Sadat will probably be able to handle the ques- tion of when to reconvene the Geneva conference by agreeing to a noncommittal pledge to return to the plenary conference "as soon as possible," but if Syrian President Asad wants to tie Sadat's hands on the next stage of phased negotiations, he could win Arab support for a summit resolu- tion denying Egypt the right to r!iscuss a second- stage Sinai withdrawal unless this were tied to similar discussions on the Golan or West Bank fronts. The Arabs' key position in international eco- nomic affairs and the various political ramifica. tions of this role will undoubtedly be a chief topic of discussion at the summit. Resolutions issued will probably: ? Affirm the Arabs' right to use oil and money as political weapons when they deem it necessary. ? Denounce "Zionist propagandists" for instigating an exaggerated and one-sided attack on Arab oil producers. ? Attempt to justify present oil policies. ? Emphasize Arab "reasonableness" and readiness to cooperate in the effort to avoid international economic chaos. No decisions are likely, however, on the substance of oil policies. Oil producers make up no more than a quarter of the total membership of the Arab League, and they will not readily submit the essentials of their policies-pricing, the specific political uses of oil, or the use of affluent colleagues. Page 3 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 I I Japan: Anti-US Demonstrations A major opposition rally in Tokyo on Octo- ber 21, protesting the alleged presence of US nuclear weapon. in Japan and President Ford's visit next month, fell short of the sponsors' goals. The organizers claimed an attendance of 70,000 after forecasting a total of 100,000, but police estimated that only 26,000 participated. The rally, sponsored by the Communist, Socialist, and Komeito parties, adopted various resolutions and issued a statement to President Ford demanding that he call off his trip. The gathering in Tokyo and similar meetings elsewhere in the country were generally peaceful. The public controversy in Japan stemming from allegations of a US nuclear presence has provided the political left with a more favorable atmosphere in which to revive its sputtering cam- paign against the US-Japan Security Treaty and also to oppose the President's vi it. The results on October 21, however, indicate that no major groundswell of public indignation, against either the weapons issue or the presidential visit, has yet developed. The left, moreover, seems unable to unite in an all-out effort. While the Communists are strongly opposed to the visit, the Socialist and Komeito parties have only recently joined them, drawn more by the opportunity to focus at- tention on the nuclear question than by outright opposition to the presidential visit. Opposition forces have set November 18, the day President Ford is scheduled to arrive in Tokyo, as the next major date in their campaign, but they will encounter difficulty in maintaining even their current momentum. The Diet is not in session, which deprives the opposition of an important propaganda forum. The Japanese media, while giving heavy play to the nuclear weapons question, generally supported the Pres- ident's trip when it was first announced and have since avoided critical editorial comment. Rank- and-file union members, who must supply bodies for any massive street campaign, are preoccupied with the issues of inflation and wage increases and have evinced little interest in an anti-US move- ment. The opposition parties, moreover, have so far shied away from calling for confrontation with the authorities when the President arrives. The US embassy, at least at this point, believes that opposition activities during the Pres- ' ident s stay in Japan will remain within politicall 25X1 25X1 Page WEEKLY REVIEW Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Italy: Fanfani's Last Try Christian Democratic party thief Amintore Fanfani may be on the verge of abandoning his effort to revive the center-left coalition. His party persuaded him this week to make a last attempt to break< the deadlock that has developed between the Socialists and the other three parties, osten- sibly over the issue of government policy toward organized labor. During more than a week of hard bargaining, Fanfani has succeeded in narrowing inter-party differences largely to the labor question. Although the Sccialists did not renounce their policy of cooperating with the Communists in certain local governments, they backed away from their earlier call for formal collaboration between the national government and the Com- munists; the Socialists, for example, did not mention the Communists in a list of ten demands presented to Fanfani over the weekend. Fanfani, in turn, has shown flexibility toward the Socialists' demands for selective loosening of credit and measures to avoid sub- stantial unemployment. The Christian Democrats, moreover, were reportedly ready to yield another important cabinet post to the Socialists. Neither side has budged, however, on the question of how to respond to labor's current drive for a costly benefits package coupled with steep increases in wage adjustments that are automatically linked to the cost-of-living index. Labor-management talks on these issues are bogged down, and the Socialists-in their pro- posals for a new government program-are backing the unions to the hilt and calling for an agreement in principle with them on general eco- nomic policy. The other parties are convinced that too many co cessions to labor would s:uttle Italy's two-month-old austerity program-the linchpin of efforts to reduce the country's mounting budget deficit. The Socialists have often said that they could not remain in government if it meant netting out-of-step with their constituents in oiyani-ad labor. Although the Socialists yesterday declared themselves open to further talks, they may yet conclude that a temporary opposition role would be more advantageous politically. If Fanfani gives up, President Leone could tap another Christian Democrat as "formateur." Leone would be more likely, however, to accept Fanfani's failure as evidence that party positions are for the moment irreconcilable. In that event, the immediate prospect is for some kind of weak caretaker government to prepare the way for either a later attempt to re-form the center-left coalition or-as a last resort-parliamentary elec- tions. There is practically no enthusiasm for new elections. So far, only two groups are publicly advocating this course-the majority faction of the small Social Democratic Party and one left- wing faction of the Socialist Party. Those Social Democrats who support new elections apparently believe that such a contest would provide a chance to strengthen centrist elements at the expense of the left. There is little evidence to support this belief, however. An attempt to weaken the left through early elections in 1972 failed, and recent developments suggest that if elections were held now, the Communists and Socialists would gain seats. Everyone else, including the Communists and the majority of Socialists, has so far argued that a long campaign would make it even more difficult to come to grips with Italy's mounting economic problems. The Communists and most Socialists are content to await regional elections this spring in which both parties expect to do well. Meanwhile, the political stalemate continues to have an adverse impact on the economy. Prime Minister Rumor's resignation on October 3 in- tensified pressure on the lira. Although this has eased somewhat, the Bank of Italy was required to pay out about $30 million a day last week to support the lira. Should present levels of interven- tion prevail through the remainder of the year, Italy's 1974 balance-of-payments deficit will an- Page 5 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 The competition between France and the US to provide Belgium, Norway, the Netherlands, and Denmark with replacement aircraft for their aging fleet of Lockheed F-104 Starfighters is entering the final phase. Defense ministers of the informal consortium formed by the four NATO countries last April met ;n Brussels on October 7 to consider their steering committee's initial eval- uation. The preliminary report gave the two US contenders-the Northrup YF-17 and the General Dynamics YF-16-a significant lead over the French Dassault-Breguet Mirage F1/M53. In order to forestall a possible split with the Belgians-who tend to favor the Mirage and are under a great deal of pressure from the French- the defense ministers agreed to meet again after a final report is ready in December. The report's conclusions probably will not be acted upon until January. The delay is significant because January is when the US air force is scheduled to choose one of the two American prototypes for its own inventory. A key factor in the consortium's deci- sion is the number of aircraft to be purchased by the nations competing for the order. This will affect the cost of the airplane and will determine to a great extent the future availability of spare parts, as well as the pressing question of whether there will be, in fact, a standard NATO fighter. The US Defense Department proposes to order over 600 of eith, the YF-16 or the YF-17 and to station some 250 of them in Europe re- gardless of the consortium's choice. The intension to locate a significant number of aircraft in Europe weighs heavily in favor of a decision for one of the American fighters. The opportunity for the air forces of the consortium countries to become tied into the US logistics and main- tenance system in Europe is an important addi- tional incentive to buy US planes. By comparison, Paris' decision to equip the French air force with only 30-40 of the F1/M53 appears inadequate. Another aspect of the sales competition is France's implied willingness to consider asso- ciation with Eurogroup-the informal caucus of NATO's European defense ministers-if the Mirage were chosen. The four NATO countries are anxious to get France into Eurogroup and such a concession by Paris would have consider- able impact on the consortium's decision. The signals from Paris are contradictory, however. Al- though Defense Minister Soufflet reportedly broached the subject to tha consortium's defense ministers in September, he later publicly denied that France was considering membership. Paris may be working behind the scenes to arrange an informal "association" with Euronad-the arma- ments subcommittee of Eurogroup-arguing that such a course would not constitute membership in Eu.ogroup and thus would not compromise French "independence." The Cyprus problem moved no closer to resolution this week, and there is little prospect that it will until new governments are installed in Athens and Ankara. Makarios' ultimate role must be decided before any significant progress can be made toward reaching a political settlement on the island. In the meantime, conflicting Greek and Turkish claims to oil rights in the Aegean are again threatening to become a live issue as the Turks have authorized further exploration in the area. Greece: Election Campaign Moves Ahead The campaign for the first Greek elections in ten years is shifting into high gear. With the balloting on November 17 slightly more than three weeks away, re-organized and newly created parties are beginning to announce slates of candi- dates and stake out positions on the issues. Leftist Andreas Papandreou appears to be better or- ganized than the rest, but he is still expected to finish no Netter than a distant third. Prime Minister Karamanlis has been some- what slower getting started, but lie has finally put together a slate of candidates. Karamanlis' New Democracy slate includes 288 candidates, 194 of whom are making their political debuts. The New Democracy candidates are drawn from a broad spectrum of society, but the large number of political newcomers and unknowns could be a Page 6 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 ~~ Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 I I drawback. Mich will bi: riding on the prestige and popularity of i\aramanlis. The arrest and exile on October 23 of ex- president Papadopoulos and four of his close asso- ciates in the junta that overthrew the civilian government in 1967 were designed to satisfy pub- lic sentiment that justice be done and leading personalities of the military regimes punished. Prime Minister Karamanlis had been vulnerable to criticism from the left that he had not broken decisively with the past, and it was becoming a major campaign issue. Karamanlis may also have been reacting to earlier indications that Papadopoulos and other ex-junta leaders were planning to form a political party or to support the newly formed National Democratic Union led by Petros Garoufalias. The right-wing National Democratic Union will draw votes from Karamanlis' conservative constituency. An emissary of Karamanlis has reportedly been trying to persuade disgruntled conservative labor leaders-ousted under a recent government de- c,ee-not to support Garoufalias, claiming that even if his party got only three percent of the popular vote, it could be very damaging to Kara- manlis' electoral prospects. Papadopoulos does not retain significant support in the army and his arrest is not expected to draw a strong reaction from the armed forces. Potential coup-plotters in the army still seem to be taking a wait-and-see attitude toward the Karamanlis government. Turkey: Moves In The Aegean The Greek-Turkish dispute over oil rights in the Ae-:an could be rekindled as a result of Ankara's decision to move ahead with oil explora- tion in the area. The Tt'rks have signed contracts with Nor- wegian and !Danish companies to conduct seismic surveys. The exploration is expected to begin by late November. An official in the Ministry of Power has informed the US embassy in Ankara that the Turkish Petroleum Office has also con- cluded an agreement with an American con- sortium for seismic research and exploratory drill- ing. The Turks reportedly want to keep this new agreement quiet for now. The official said that Ankara has rejected Greek protests over Turkish activity in the Aegean Sea, but th,. ~t is willing to negotiate the problem. The timing of the Turkish announce- ment of the coat-racts with the Scandinavian com- panies, however, comes at an awkward time for Greek Prime Minister Karamanlis since problems with Turkey over Cyprus are already a hot cam- paign issue. The Turkish actions seem likely to spark additional Greek protests, but both sides can be expected to avoid any direct confrontation over the oil rights issue. The Greeks, in fact, have expressed some interest in resolving the problem as part of a package that would include Cyprus, but there has been no progress in this direction. Cyprus: Marking Time Efforts to create an atmosphere conducive to Archbishop Makarios' early return to the island continued in Nicosia this week. Vassos Lyssarides, a leftist political leader and Makarios supporter, was reportedly among the organizers of a series of demonstrations that carried an underlying theme of sups`- -? ; or the return of the Archbishop. On the surface, however, the demonstrations focused on such issues as US policies, the refugee problem, and Turkish military forces on Cyprus. The strongest outcry was against Turkish over- flights of Greek Cypriot areas. Labeling the flights a breach of the cease-fire agreement, Acting Pres- ident Clerides told the US embassy that if they continued, the national guard might have to fire on the planes to maintain its credibility in the Greek Cypriot community. Turkish officials on the island described the overflights as recon- naissance missions in response to reports that Greek Cypriots were receiving reinforcements and equipment. Despite these problems, the exchange of Greek and Turkish Cypriot prisoners was resumed on October 18 after a three-week hiatus. Clerides says that he expects the prisoner transfers to be 25X1 25X1 Page Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 The election last May of Independent Republican Valery Giscard d'Estaing-the first president from a minority party since the found- ing of the Fifth Republic-has created consider- able political turmoil in France. Tl-.e Gaullists, who ruled the roost for 16 years, are in disarray, and Giscard's intention to form a "new majority" has led to a spate of attempts to restructure party alignments in the fractured center of t;,e French political spectrum. The Left Alliance-Socialists, Communists, and Left Radicals--is also regroup- ing. The Communists have initiated a massive campaign to broaden the party's base by opening it to leftists of all political hues. They are also hoping to make the party politically "respect- able" by emphasizing its Frenchness, playing down its ties to Moscow, and diluting its tradi- tiona! ideology. Moreover, Secretary General Marchais is trying hard to convince rank-and-file party members that cooperation with Socialists and other forces of the left is no longer a matter of rhetoric, but i political necessity. Marchais' efforts have been set back by recent wrangling with the Socialists. The friction is caused largely by an unvoiced fear on the part of the Communists that their dominance of the left is threatened by the success of their Socialist ailies. This fear stems most immediately from the results of the legislative by-elections held at the end of September, in which Socialists made strong gains and the Communists lost ground in five of the six contested districts. Investigation of the voting patterns conf;rmed Marchais' suspi- cions that while the Communists had loyally backed all candidates of the Left Alliance, some Socialists and Left Radicals had balked at sup- porting Communist candidates. A bitter exchange of name-calling followed, and the Socialists canceled an important Alliance "summit" meet- ing scheduled for October 15. The Communists' distrust of their allies has also been fueled by the recent Socialist emphasis on nationalization of key industries, worker management, and pressure tactics against the gov- ernment. This new Soc;alist "Plan for Society" has moved the party to the left of the moderate position taken by Marchais. The Communists are apprehensive that the shift will weaken their party's hold on its traditional labor constituency. The Socialists have, in fact, strengthened their labor and radical credentials and are a step closer to becoming a multi-constituency party capable of dominating the left. Their resurgence has strained the Left Alliance, but is unlikely to break it-at least in the near term. The Commu- nists' complaints and accusations mjy be 'n large part a tactical move by Marchais to appease hard- liners in preparation for the party's extraordinary congress on October 2a-25. TI.' 's Socialist Party leader Mitterrand's interpreta.-: n, 25X1 25X1 Parties of the center, meanwhile, have been reconsidering their political alliances in the light of Giscard's efforts to dimini';r his dependence on the Gaullists. Spurred by Socialist gains in the by-elections, centrist political leaders have formed two new political groupings. Both of these alli- ances are cultivating a "reformist" image that seems designed to protect Giscard's left flank against inroads by the Socialists while pushing most of the Gaullists toward an increasingly un- popular position to the right of the government. Although the Gaullists still occupy the largest bloc of seats in the assembly, they are leaderless acrd dispirited. If the Communists are worried about losing their dominance of the op- position, the Gaullists live in fear of being unable to regain control of the majority. Small business- me! and farm"rs-traditionally staunch Gaul- lists-have been hardest hit by inflation and in their bitterness, they are withdrawing crucial sup- port. Gaullist candidates suffered heavy vote losses in the by-elections, and Prime Minister Chirac has wee ned fellow Gaullists that they will be lucky to retain 150 of their 184 seats after the next legislative election. For the moment, Chirac appears to have succeeded in marshaling Gaullist Page 8 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 ~~o~~ Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 deputies behind the government, but the right wing is smarting under a prime minister who i; obviously Giscard's man, while the left frir,ae speaks openly of deserting a sinking ship. PORTUGAL: ELECTORAL WHEELS TURN The cabinet's approval last week of a new electoral law indicates that the Portuguese govern- ment is still determined to hold elections for a constituent assembly next March. The assembly's task will be to draw up a new constitution for a democratic government to replace the authori- tariar regime overthrown in April. Recent state- ments by leading military officers, hov?.ver, cast some doubt on the commitment of the Armed Forces Movement to moving expeditiously toward restoring civilian rule. The elaborate draft electoral law, which is expected to be confirmed without modification by the Council of State and then promulgated by President Costa Gomes before November 15, establishes general requirements for voting for the constituent assembly and sets qualifications for canaidates in the March elections. Suffrz,je is universal, with some exceptions that tend to favor "progressive" groups, reflecting the predominantly leftist orientation of the draft- ing committee. Socialists and Communists suc- ceeded in obtaining the right to vo-:e for 18-year- olds, overriding the smaller, mo.-e conservative parties, which preferred a minimum age of 21. Another controversial issue involved the voting qualifications for emigrants. The Socialists, as well as the centrist parties, expected to benefit from a non.-restrictive policy toward citizens outside metropolitan Portugal. The Communists on the other hand, reportedly conside?ed the emigrant popu,etion to be generally conservative and wanted to bar thorn completely from the election. A compromise solution limits the vote to those emigrants who have left the country in the last five years. 25X1 25X1 Public officials and those who had actively supported the Caetano and Salazar regimes were also declared ineligible to vote in the constituent assembly elections. The cabinet, however, has been unable to agree on just who fits into this category. To expedite the passage of the new law, this problem will be tackled in a separate law at a later date. The draft law also sets out provisions for the selection of deputies whose task it will be io draft the new constitution. Candidates must run as members of political parties or coalitions, whose membership will be restricted to avoid chaotic tactiorralism. Voters will select party lists and will he unable to vote a split ticket. A national electoral commission will be created to supervise the elections. Parties will be granted access to broadcasting time on radio and television on boin state and commercial stations. Campaign expend'tures will be limited and care- fully regulated. The constituent assembly will be given ninety days in which to formulate a new constitu- tion. Once its task is completed, the assembly will be disbanded and the corstitution presumably will provic'a for general elections to be called. The Lisbon regime has been imprecise about how quickly general elections will follow. Min- ister without Portfolio Vitor Alves-a leader in the Armed Forces Movement-said it would be a Icng time before a civilian government could assume responsibility for leading the nation. Another important figure in the Armed Forces Moverr,^-nt-Otelo de Carvalho, a leader of the April coup who is deputy commander of the Continental Operations Command and military governor of Lisbon-is also doubtful about a re- turn to civilian rule, particularly since inflation and unemployment in the coming months could 25X1 25X1 Page 9 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 I I Economic coopeiatiun will be the para- b ouiIt theme during Chancellor Schmidt's tluee- day sunu?it meeting with Soviet leaders that hegins or October 28 in Moscow. Both sides hope to wrap up long-stalled negotiations un several large-scale industrial projects. Lingering disagree- ments on Berlin issues, However, may dampen the atmosphere and reinfc,rce Schmidt's reluctance to grant government-barked credits or loans to the USSR. Interest in expanding economic relations is a prime factor motivating the Soviets, who want subsidized credits and greater access to West German technology. Soviet leaders also want to size up Schmidt first hand, as they regard his visit as a picking up of the threads of bilateral surrm- mitry that Brandt and Brezhnev wet e weaving in their ikree meetings. Schmidt's interest in the visit is less trmns- parent. There are nn urgent bilateral problems, aril lie is under little public pressure to pursue Osipolitik. On the contrary, opposition Christian Democrats and West Berlin Mayor Schuetz, a Social Democrat, have criticized S-hmidt for not Schmidt mccting Brczlrncv in 1973 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 taking more care in defending West Berlin's in- terests in the dispute with the Soviets over the Federal Environmental Office and, more recently, in negotiations with Pankow. In choosing to disregard these considera- tions, the Chancellor has shown that he is firmly committed to detente. Pressure from Schmidt's party colleagues plays a role, but his motives are much broader: ? Foremcst the summit keeps Bonn in step with Washington in pursuing detente with the Soviets. ? Also, the visit will improve the atmos- phere between Bonn and Moscow. This cou:d strengthen business confidence in dealing with the East. ? Lastly, an active Ostpolitik accords with Schmidt's view of fulfilling West German in- terests, such as securing energy supplies from the Soviets, even if it requires Bonn to oper- ate beyond the scope of a collective Western approach to the energy problem. Disagreements over Berlin, however, still cloud relations. Negotiations on three bilateral accords on humanitarian and scientific matters are deadlocked on the ever-controversial question of West Berlin's inclusion. An inhibiting factor is the Soviet distrust of Foreign Minister Genscher, who wi!I speak for the West German side in dis- cussions of Berlin issues. Soviet Foreign Minister Gromyko regards him as a "crude" lightweight. The Soviets prefer to deal with Schmidt, whose intellectual acumen and grasp of foreign affairs they reportedly respect. Given the Chancellor's interest in expanding economic cooperation, they hop, to persuade him not to insist on a settle- ment of Berlin issues as a precondition for eco- nomic cooperation. It is not clear what price Schmidt is willing to pay to gain greater access to Soviet raw ma- terials. In the past, he has argued against sat- isfying Soviet demands for subsidized credits on the grounds that this would only contribute to West German inflation. Schmidt, however, is very USSR: TEST SERIES ENDS The Soviets this week completed another series of extended-range missile tests with the launching of two SS-X-17 ICBMs. An impact area in the Pacific, some 500 miles north of Midway, was to have been closed to shipping from October 20 to 30. Following the second test on October 22, however, Moscow an- nounced that the planned tests had been com- pleted and ended the closure. This was the fourth closure for extended-range missile tests this year. Earlier this month, two SS-N-8 na- val ballistic missiles were fired to a nearby impact area. In January and February, seven ICBMs were tested to an extended ran e in the Pacific. 25X1 eager to gain final approval for a project involving West German construction in the USSR of a nu- clear power plant that will, in turn, deliver elec- trical energy to West Berlin and West Germany. Bonn's interest in this project is very strong, and the West Germans have pressed the US and the UK to support its request to provide the requisite technology without insisting on Soviet acceptance of IAEA safeguards. Schmidt, in sum, is in a delicate position. Withholding subsidized credits could sour the at- mosphere of the summit, but he would be vulner- able domestically if he agreed to the credits while the Soviets remained inflexible on Berlin. Bonn's EC partners, who have listened to Schmidt's ad- monitions about the need to control inflation and to pursue common policies on energy and credits to the East, may also look askance at West Ger- man financing of these large projects. Whatever his decis,on on credits, Schmidt will adhere to the EC's guidelines and refuse to negotiate a new bilateral trade treaty. This European approach will also be evident in discussions with Brezhnev on the European security conference and the ne- gotiations on troop reductions in which the Chan- cellor can be expected to defend Western nego- tiating positions forcefully. Page 11 WEEKLY REVIEW Sanitized Copy Approved for Release 2011/06/21 : CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 a at EUROPEAN COMMUNISM: PABLUM IN WARSAW Mo.,cow's willingness to yield on some of its objectives and to tolerate expressions of inde- pendence highlighted the preliminary meeting of European Communist parties in Warsaw last week. The bland communique summarizing the three-day gathering cited the participants' "de- sire" to hold an all-European conference in Berlin by mid-1975. It said that the agenda would be confined to Europe and referred neither to China nor to a world conference-topics of long- standing importance to the Soviet party. The Soviets seem willing to put off any direct attacks on the Maoist leadership and to allow others to defend the concept of separate roads to socialism in order to clear the way for the formal conference next year. Another pre- paratory session will be held, probably in Decem- ber or January, but Moscow regards the formal conference as especially important with the Con- ference on Security and Cooperation in Europe approaching its conclusion. Although the Warsaw participants went no further than to end')rse standard positions in Soviet foreign policy and to issue a banal call to fight "against fascism and for freedom, democ- racy, and independence," Moscow nevertheless probably rates the meeting a success. The Soviets did manage to get 28 European parties to attend, including-for the first time-a Yugoslav dele- gation. Only the Communist parties of Albania, Iceland, and the Netherlands did not attend. Council of Ministers Palace in Warsaw Several participants, particularly delegates from Italy, Romania, and Yugoslavia, used the forum to emphasize again their independence of Moscow. In a veiled reference both to Moscow's hegemony and to the recent cominformist plot, Aleksandar Grlickov, the chief Yugoslav delegate, asserted that it is "necessary to deal with disputes and all parties on the basis of equality and interference." The Yugoslav also said that "any all- embracing documents" adopted at this or any other meeting "cannot comprise a compulsory code for settling the main questions." Grlickov made clear that Yugoslav participation in any future conference will be contingent on Moscow's continued good behavior. He also undercut Mos- cow's complex efforts to arrange a world Commu- nist conference when he said that conditions for it "are absent." Moscow's indulgence of such views sr ggests that it will be satisfied merely to have the formal all-European conference take place next year, even if it does no more than endorse the general outline of Soviet policy. Progress toward a repre- sentative world conference, however, will clearly require the Soviets to accept continued criticism from a number of independent-minded parties Page 13 WEEKLY REVIEW Oct 25, 74 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 PAKISTAN-AFGHANISTAN: STILL HOSTILE Recent Pakistani army operations have sharply reduced a 20-month-old tribal insurgency in Baluchistan Province, lessening the possibility of an early full-scale confrontation between Paki- stan and Afghanistan over this issue. Relations between these two Islamic neighbors remain poor, however. Their leaders deeply distrust each other di .d continue to differ strongly over the status of Baluchistan and of Pakistan's other border prov- ince, the North-West Frontier. The insurgency in Baluchistan appears to have reached a watershed this month. Prime Min- ister Bhutto announced on October 15 that, as a result of recent army sweeps through the troubled portions of the province, most of the rebels had either been captured or had accepted his offer of amnesty. Bhutto did acknowledge that some remnants of the insurgent movement were still at large, and he gave these remaining rebels until December 15 to accept the amnesty. Bhutto will now probably refrain from major new offensive operations in Baluchistan for at least a couple of months. He will want to see if Awhian Sea 556761 10-74 the rebels' diminished numbers, the onset of winter weather, and political maneuvering on his part can eliminate what remains of the threat to central government control over the province. Neighboring Afghanistan has long sympa- thized with the efforts of tribal dissidents in both of the Pakistani frontier provinces to block Is- lamabad from establishing fuller control over their affairs. The Afghans argue that the two provinces should be transformed into a new entity, called "Pushtunistan," which would be either autonomous within Pakistan, independent, or affiliated with Afghanistan. Afghan advocacy of the Pushtunistan con- cept is based on both ethnic and; strategic con- siderations. The Pushtun community, which is only a small minority in Pakistan as a whole, is the dominant ethnic group both in Afghanistan and in Pakistan's North-West Frontier Province. Baluchistan's ethnic ties to Afghanistan are much thinner, but the Afghans have been opportun- istically stressing the Baluchistan issue because it is there that the Bhutto government has been faced with an armed-albeit low-level-tribal in- surgency. Additionally, a "Pushtunistan" that in- cluded Baluchistan would enjoy access to the Indian Ocean. Afghan backing for the Baluchi rebels has consisted of propaganda support and possibly some training and material aid. Afghan President Daoud, a long-time strong advocate of the Pushtunistan concept, sharply stepped up agitation on the issue after he re- turned to power in a military coup in July 1973. Afghan military intervention in the Baluchi rebels' br:half was never too live a possibility, given Pa:istan's military superiority, and it seems even less likely now that the rebellion has quieted. But each country will continue to sus- pect the other of unfriendly intentions. The Bhutto government has frequently al- leged in private that Afghanistan, with Indian and Soviet support, is working to undermine Paki- stan's stability and territorial integrity by aiding Pakistani tribal dissidents and other "subver- sives." The Daoud regime, for its part, has shrilly Page 14 WEEKLY REVIEW Oct 25, 74 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 accused Pakistan of a multitude of sins, ranging from "suppression" of i-'ushtun and Baluchi rights to abetting anti Daoud coup attempts. These allegations are likely to continue. Baluchistan, moreover, may eventually become the main focus of tension once again. Bhutto is apparently de- termined to destroy the "feudal" tribal system there, and some tri`-)esmen may resume insurgent activities, which Afghanistan is likely to support. A recent diplomatic incident may also have persuaded the Shah that Iraq was not serious about the talks. The Iraqi, returned an Iranian diplomatic note on October 9 because it referred to the "Persian Gulf" rather than the " Arab Gulf." Only last month the Shah strongly pro- tested to several Arab governments their use of the term "Arab Gulf," and he probably regarded the Iraqi action as a calculated affront. 25X1 IRAN-IRAQ: IMPASSE CONTINUES The foreign ministers of Iran and Iraq met twice this month in a further gesture by their governments to the UN Security Council resolu- tion adopted last May that called for a negotiated settlement of their long-standing border dispute. The ministers, who met while attending the UN, made no progress toward resolving outstanding issues. Last August, both sides agreed to talks on the foreign minister level following preliminary discussions in Istanbul. At their first meeting on October 11, Iranian Foreign Minister Khalatbari and Iraq's Taqa indicated they were prepared cG discuss several problems, but neither showed flex- ibility on the major issue-Tehran's demand that the border formed by the Shatt al Arab be re- drawn. Tehran takes the position that the 1937 treaty locating the boundary on the Iranian side of the river was unfairly imposed by the British. The Shah proposes a mid-channel boundary. Tehran has never been enthusiastic about the talks and is not likely to be too disturbed by the impasse. Unlike Baghdad, which wants to avoid confrontations with Iran while so heavily engaged against the Kurds, Tehran is under no great pres- sure to reduce the strain between the two govern- ments. Iran is probably content to maintain diplo- matic pressure by pressing for maximum political concessions, while fuelii, Iraq's internal problems by aiding the Kurdish r.:bellion. 25X1 At the same time, Iran does not want to be publicly identified as the obstacle to improved relations and will not wish to rule out the pos- sibility of resuming the talks. On his return from the UN, Khalatbari said the talks would resume "in the near future." The death of Taqa on October 21-he was in Rabat to prepare for the Arab summit-and the continuation of border incidents, however, make ptior unlikely. 25X1 Page 15 WEEKLY REVIEW Oct 25, 74 Sanitized Copy Approved for Release 2011/06/21: CIA-RDP85T00875R001000070027-1 troop reduction options ranging from maintaining the status quo to a cutback to 75,000. Defense officials hope to convince the cabinet to hold personnel scrength at about 77,000. Present senti vent in the cabinet favors maintaining the NA f0 and North American defense commitments, closing and consolidating military facilities in Canada, and substantially reducing peacekeeping c 'mmitments. Prime Minister Tr ideau has consistently given national defense a Iu,w priority and there are no influential defense a,lvocates in the govern- ment. Canada currently ra!,'