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December 27, 2016
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May 11, 2010
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July 5, 1975
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assified in Part - Sanitized Copy Approved for Release 2012/02/23 : DP85T00875R001000080031-5 meekly Review Top Secret Top Secret 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: Copy N2 66 1 CIA-RDP85T00875 R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : IA-RDP85T00875 R001000080031-5 CONTENTS (Mdv 4, 197.5) 1 India: Under Control -Soviet Support 3 Panama: Uncertainty on Canal Issue The VJEEKI-Y REVIE\', i-:>uo-_f every Friday morning by the Off - ._ lic)':11< l1) r` ...L~d the (,f~i!.,_ h, ilic n o,_: C? ,r;ot h!c Top!;::; reoUirir;n r~lcro cc role cns~+-o tr_?t:tro:n0. orcd the; _ffcre ,r!"!Hishc;i .. parntr_?iv on Spocinl Rcoporis .ore listed in the cont:,nt:;, MIDDLE EAST AFRICA 4 Portugal: Council Reorganized 5 Italy: Post-Election Maneuver: 6 CEMA Ministerial 7 EC: Moving Ahead 9 The Balkans: Chinese Wooing 10 USSR-Somalia: Cover-up at Berbera 12 CSCE: Trying for a Summit 25X1 13 Middle East: Pressing Rabin; Cool Soviets 15 Lebanon: A Government at Last 16 Syria: Missiles Confirmed 17 Spanish Sahara: Tension Mounts 17 Cape Verde Islands: Becoming Independent EAST ASIA PACIFIC 19 Laos: The Last Straw? 20 Australia: Government Crisis 25X1 WESTERN HEMISPHERE 23 OAS: Tangled Again 24 Argentina: Labor's Demands Undermini 25 Honduras: Peasant Unrest 26 Peru: Navy Versus Velasco Comments and queries on the contents of this publication are welcome. They may be directed to the editor of the Weekly Review, Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : ssified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 INDIA Acting under the wide authority conferred on the government L)y the proclamation on June 26 of a state of emergency, Prime Minister Gandhi continued this week to move against her political opponents. She also tried to rally popular support for her cause by promising improved economic conditions. The inability of the now leaderless opposition to challenge the repressive acts of the government indicates that Mrs. Gandhi has, for now, successfully carried off her controversial move. Sporadic clashes b 'tween police and demonstrators erupted in several states where opposition parties have their broadest support, but for the most part public reaction apparently has been subdued. More trouble may be brewing, however, in two states, Gujarat and Tamil Nadu, that are not ruled by Mrs. Gandhi's Congress Party. On July 1, Mrs. Gandhi unveiled a new economic program featuring something for everyone, but especially relief for the poor and strong measures against the wealthy. Her promises included more action against inflation, including credit controls and curbs on govern- ment spending; vigorous implementation of land reform laws; crackdowns on hoarders and smugglers; and controls on prices for student housing and food. Prime Minister Gandhi meets with her Congress Party colleagues Page 1 WEEKLY REVIEW Jul 4, 75 :lassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 25X1 The proposals are typically long on polit- ical considerations and short on the wherewithal to accelerate the slow-growing economy. Agri- cultural production is the key to India's growth, but the Prime Minister offered no new programs aimed at increasing food supplies. If she vigor- ously pursues land reform and succeeds in cur- tailing grain hoarding, she may even reduce agri- cultural production. Despite the outward appearance of nor- malcy, Indian political life has undergone a basic transformation. Invok;ng special emergency powers, Mrs. Gandhi's government has: ? Suspended civil liberties, including the right of habeas corpus, and widened its authority to arrest and detain political foes and racketeers. ? Jailed more than a thousand politicians and "troublemakers." ? Imposed strict censorship rules on both the Indian press and foreign correspondents. ? Outlawed public gatherings of five or more persons in the capital area and advised the states to do so also. With most opposition leaders in jail or underground, the threat of a nationwide civil disobedience campaign to force Mrs. Gandhi to resign has receded. A new outbreak of demon- strations, in which students would likely play a key role, could erupt should jailed opposition leader J. P. Narayan die; the elderly Narayan is in poor health. So far, Mrs. Gandhi appears to be retaining the support of key Congress Party leaders. A new cabinet-level committee set up to oversee the administration of the emergency regulations includes the two ministers commonly con- sidered potential contenders for Mrs. Gandhi's post-Agriculture Minister Ram and Foreign Minister Chavan. Reports cor.tinue to circulate that Mrs. Gandhi has both men under surveil- lance. Apparently, many Congress Party mem- bers privately deplore the recent authoritarian moves. They are intimidated, however, by the arrest last week of party Lolleagues who openly criticized the Prime Minister for refusing to resign following her conviction last month of campaign violations in 1971. Military leaders also appear willing to go along vrith recent events. They reportedly were not forewarned of the emergency decree, and most likely do not want to get involved in enforcing emergency regulations. The police and pa'amilhary forces should be able to contain any civil unrest. For the present, the army, as well as private business leaders, seems willing to tolerate suppression of civil liberties, in hopes that a more disciplined and efficient society will emerge. Conversely, many politicicns, jour- nalists, editors, and students are described as despondent. They doubt Mrs. Gandhi's claim that the stringent new controls are temporary, and they "rear that as long as she remains in office, freedom of expression will never be fully restored. But for most of the population, living at a subsistence level or below, Mrs. Gandhi's renewed pledge to alleviate poverty is the prime concern. If the interne: situation remains calm, Mrs. Gandhi may reconvene parliament by early August in order to secure required approval for the emergency decree. The two-month deadline for approval could be stretched, however, if she dissolves parliament. The Supreme Court con- venes on July 14 to delib?rate on her appeal, and a final decision is expected by late summer. To the surprise of no one, the USSR has come out firmly on the side of Prime Minister Gandhi. Pravda has published the full text of Mrs. Gandhi's emergency decree, commenting that the decree was needed to defend India against "reactionaries." Page 2 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ssified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 I I The Soviets probably expect that Mrs. Gandhi can carry off her pol;tical gamble, and they almost certainly regard her as more friendly than any likely successor. The Soviets hope present problems will force her to become more dependent both on pro-Soviet figures within the Congress Party and on Moscow- oriented Indian communists. Judging from Soviet propaganda and private statements, Moscow is determined to head off what it foresees as a major effort by China to expand its influence in Asia in the post- Indochina war period. Moscow regards India as an important counterweight to China and thus sees the situation in India as an opportunity to score against Peking by strengthening Soviet influence in New Delhi. Peking has sharply criticized Prime Minister Gandhi's latest actions, leveling its harshest personal attack against h in some time. The Chinese paid special attention to Soviet support for her moves, charging that she is attempting to act as Moscow's "subregent" so that the USSR can maintain its control of India and its influ- ence in South Asia. The Chinese handled with discretion the Prime Minister's conviction on June 12, perhaps fearing that a heavy propaganda hand would help her cause. Peking may now believe that her tactics and open Soviet support will speed her departure from office, and that propaganda on these developments is very rniirh China's interest. 25X1 Manama: Uncertainty on banal issue The Panamanian government is presenting an appearance of calm in the face of a vote by the US House of Representatives to deny funds for the canal treaty talks, but officials of the Torrijos administration are seriously concerned ibout the future of the negotiations In a statement to the press on June 26, General Torrijos said that he was confident the US would uphold its commits cent to negotiate, despite the House vcte. Although other Panamanian officials publicly have been critical of the House action, they pr'vately have told US officials that they remain committed to the negotiations. The press, most of it government controlled, has also taken a fairly restrained position, warning the public not to be "trapped" into resorting to violence by groups that want to sabotage the negotiations. The National Guard effectively halted a demonstration at the US embassy by some 500 ultranationalist students on June 30. The demonstrators condemned both the US and the Torrijos government for "conspiring" to negotiate a treaty that would fall far short of transferring to Panama total control of the canal. Torrijos' handling of the negotiations is coming under increasing fire, and he may soon conclude that he must make some public declaration about this issue. He is continuing to seek foreign support as a hedge against a breakdown in the talks. On July 4, he will travel to Mexico for a meeting with President Echeverria, and he also may soon confer again with the presidents of Colombia and Venezuela. The Panamanians are almost certain to seek additional pledges of support at the OAS meeting !ater this month in l'ncta P ra Page 3 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ssified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 I I PORTUGAL: LOUNCIL REORGANIZES The ruling Revolutiona:y Council ended its second week of deliherations on the future of Portugal '-y announcing that it was reorganizing in order to improve efficiency in the decision- making process. The charge does not zppear to be directly related to the continuing power struggle between moderate and radical factions. That struggle, however, will undoubtedly domi- nate the meeting of the armed forces general assembly next week. The reorganization will involve the creation of an 11-man central committee with subordi- nate political, military, and executive commit- tees. The central committee will be charged with handling day-to-day council business, but major policy decisions will continue to be made by the full body. Military leaders appear to have recog- nized that "consensus rule" by an unwieldy body of 29 persons is not effective, particularly when the situation often requires swift and deci- sive action by the executive body. The central committee will be limited to a few of the more senior officials, including Presi- dent Costa Gomes, Prime Minister Goncalves, internal security head Otelo de Carvalho, and council executive officer Rosa Coutinho. The chiefs of staff of the three armed services will also parti-ipate, as will four members from the political committee. The Revolutionary Council also acted on other business awaiting its approval, including: ? Passage of a decree-law creating a mili- tary judicial police service under council super vision. ? Establishment of operating procedures for the military tribunal which will judge those implicated in the abortive coup last March. ? Approval of the expulsion of any soldier who promotes discord within the armed forces, attacks senior officers or the program of the Ar ned Forces Movement, or disrupts public order or military Jiscipline. The latter law will enable military leaders to deal with certain units which openly support extreme left-wing groups, but at the same time could be used to provide a legal basis for purging officers considered too conservative. When the 240-member armed forces gen- eral assembly meets on July 8, it will probably consider hcw to implement the decision made at its last meeting in late May to establish direct links between the Movement and the people. Recent reports indicate that the military, en- couraged by the number of "popular organiza- tions" that have sprung up around the country, may try to organize the various bodies into a system of popular committees. The assembly is also expected to take up such problems as the dispute between owners and workers over the Socialist newspaper Republica and the Catholic radio station. Moderate forces will try to maintain their momentum after what a presidential aide de- scribed as a "first round" victcry won in the Revolutionary Council's policy statement re- leased two weeks ago. Foreign Minister Antunes has been credited in some accounts as having led the moderates in the council discussions. He may be attempting to build support for the assembly session by contrasting his success in eliciting economic aid commitments from the West with Prime Minister Goncalves' inability to improve the economic situation. Antunes re- turned from London on June 29 and announced Britain's full support for EC aid to Portugal. He also presided over the signing of a loan agree- ment with the US on June 30 for low-income housing. The moderates can expect to meet strong opposition from more radical factions, such as the leftist nationalists headed by Admiral Rosa Coutinho and security forces head Otelo de Carvalho, es well as Prime Minister Goncalves' pro-Communist backers. C;vilian supporters of these radical groups have been quick to capital- ize on the prison escape by 88 former agents of the previous regime's secret police to criticize the weakness of the military government and to blame the lack of authority 0.1 the moderates. rage 4 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ssified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Prime Minister Moro with Christian Democratic leader Fanfani ITALY: POST-ELECTION MANEUVERS Italy's governing parties are still sorting out their options in the aftermath of the Communist Party's unprecedented gains in the regional and local elections !ast month. A serious internal feud seems to be shaping up in the dominant Christian Democratic Parry, while the Com- munists appear content to remain on the side- lines and let the.other parties jockey tor posi- tion. Christian Democratic le,ider Fanfani's initial reaction to the election w is to try to get the Socialists immediately involv-,o in negotia- tions for a new center-left government. He wanted to draw the Socialists into talks for a new national coalition before they had time to pur together more regional and local govern- ments with the Communists. The Socialists-the only governing party that advanced substantially in the elections- made it clear late last week, however, that they intended to keep all options open at the local level. Party chief De Martino said he will not talk about a new national government until the Christian Democrats bring their politics more into line with the shift to the left revealed by the election results. The Socialist refusal to accept Fanfani's proposal intensified debate among Christian Democrats over how to stop the erosion of their party's position. In a holding action, Fanfani proposed that the party wait until fall to reassess its strategy at the national congress. The Christian Democratic left-wing factions, how- ever, want to remove Fanfani and begin an immediate across-the-board review of the party's policies. Fanfani's position was weakened this week at a meeting of the Christian Democratic directorate, when the party's key centrist fac- tions rebuffed his proposal for a delay. Instead they scheduled a meeting of the Christian Democrats' national council for July 19, at which time serious debate on party policy will begin and Fanfani's fate may be determined. The Moro government will probably re- main in place for the time being. Most political Pane 5 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ssified in Part - Sanitized Copy Approved for Release 2012/02/23 : )P85T00875R001000080031-5 CEMA MINISTERIAL Discussions at th' 29th session of the Co-incil for Mutual Economic Assistance, held in Budapest from June 24 to June 26, focused on the pace of integration, future economic plans, and the repercussions of higher prices for energy and raw materials. The participants endorsed a CEMA "multi- lateral integration plan" that provides for joint work on ten projects during 1976-80 at a cost of $13 billion. Few details were revealed, but many of the ventures in the plan are already in progress and no new projects were announced. Kosygin's contention that multilateral plans do not conflict with economic development by individual nations indicates that there was con- troversy among the participants on this subject. The East Europeans, who have been hit hard by Soviet and Western price hikes, were openly seeking assurances on future Soviet deliveries of raw materials. In response, Premier Kosygin claimed Moscow is providing Eastern Europe with additional raw materials and implied that increasing Scviet investments in this field would benefit the region. A Lle.ild communique largely masked any Soviet-Romanian friction over the nature and pace of CEMA integration. The presence of dif- terences, however, was suggested by the state- ment in the communique that the session worked cut"-rather than agreed upon-meas- 11 ures to "improve" the legal underpinnings of CEMA authority. 25X1 25X1 The communique was silent on CEMA's next move to establish a dialogue with the EC, but CEMA secretary Fadeyev later implied that the talks will continue. He stressed the familiar theme of the organization's openness and fore- cast that an announcement would be made later this summer of Iraqi participation in some joint projects. He also said that an accord with Mexico is expected in the "near future" and that the Colombians have inquired about nos- leaders fear that toppling Moro now would amount to a "crisis in the dark." His govern- ment-a Christian Democratic - Republican cabinet that the Socialists and Social Democrats support in Parliament-is still seen by nearly everyone as the best arrangement until the Socialists and the Christian Democrats iron out internal differences and firm up bargaining posi- tions at their party congresses this autumn. Although united in their refusal to nego- tiate with the Christian Democrat; now, the Socialists are divided over their longer range strategy. Many Socialists--especially on the party left-maintain that their association with the Christian Democrats is hurting them at the polls and that the party has more to gain by staying in the opposition. Party leader De Martino will have trouble leading the Socialists back into the government unless he can extract enough concessions from the Christian Demo- crats to give any new coalition a more pronounced leftist cast. The Communists are con?inuing to move cautiously in consolidating their gains. In par- ticular, they are playing down the implications their success may have on the national political scene-a tactic that probably reflects their traditional fear of provoking a counter-reaction in moderate and right-wing circles. Communist leaders are concerned that pressure could build in the rank- and-file-especially among young supporters in cities where the Communists have become the largest party-to convert the gains into national political moves. Berlinguer, however, wants to keep firm control of the situation and avoid Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: Jul 4, 75 CIA-RDP85T00875 R001000080031-5 ified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031_5 EC: MOVING AHEAD The EC councils last week reached a number of long-pending decisions, evidence perhaps that political developments in some member countries are allowing gre< er govern- ment flexibility. The bar on EC activity imposed last winter by fear of adverse impact in the UK referendum and the Italian regional elections is now no more. French President Giscard, mean- while, perhaps feeling under less immediate Gaullist pressure, is moving toward greater cooperation in the community. He is seeking to enlarge the scope of EC activity toward south- ern Europe, the Mediterranean, and the lesser de"eloped world. On the o+her hand, Bonn's unique con- stitutional , rictions on deficit spending are making Wc.. _ uermany veto almost any activity calling for new expenditures. This tends to limit new EC actions to cost-free areas, a fact which may be reflected at the heads-of-government meeting later this month. The West German budgetary constrernts strengthen Bonn in its arguments against EC inefficiency and serve to remind Germany's partners of Bonn's key financial role. Bonn's present and projected budget deficits are running up agaainst a constitutionally imposed ceiling. Chancellor Schmidt, with both the reces- sion and 1976 elections in mind, believes that new taxes could write his government's death warrant. Consequently, he has chosen to face his deficit problem with rig;d fiscal austerity aimed at all expensive initiatives in the EC as well as at some 'iithertu favored domestic programs. Bonn stood alone last week to block new funds for joint EC scientific research and led the Page 7 WEEKLY RFVIFW Aid a 7c Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : CIA-RDP85T00875 R001000080031-5 opposition to a proposal for new food aid for poor countries, despite Britain's accusation of "insensitivity to the cry of the children." Bonn evidently considers that aid to Portugal is an exception. West Germany agreed with its EC partners last week on a program to consider providing substantial financial assist- ance to Portugal quickly in order to boost democratic forces there. The EC ambassadors and the commission are to prepare soccific proposals by July 15 on the amount and terms. New expenditure is less of an issue in other areas, and the EC foreign ministers were able to ;ove ahead on Mediterranean policy. Italy removed its opposition to the admission of cer- tain agricultural products to the EC, although the concessions Rome received were somewhat less than it had wanied. As a result of Italy's action, the farm provisions of the free-trade agreement with Israel enters into force with the rest of the accord on July 1, preferential trade and cooperation accords with the Maghreb can be concluded, and negotiating directives for agreements with Egypt, Jordan, Syria, and Lebanon can be prepared. The council agreed in principle on a non- preferential agreement with Canada, to include provisions for industrial and environmental cooperation. The commission hopes the accord will establish a precedent for EC cooperation arrangements with China, Iran, and the East European states. A prime EC motive for the Canadian pact is the hope for better access to raw materials. British Foreign Secretary Callaghan scored something of an institutional breakthrough when he won a decision favoring black Africa in the contentious agricultural area. France, the only holdout, agreed to accept a majority vote on the issue. This was the first time in EC history that a majority vote prevailed on a for- eign policy issue. The EC also agreed to: ? consider Greece's application for membership: ? favor a CSCE summit at the end of July, if progress this week warrants it; ? resolve differences-again by majority vote-on a cooperation agreement with Sri Lanka; ? implement the EC agreement with African, Caribbean, and Pacific countries on July 1 or an interim basis, pending ratifica- tions from the EC-Nine and th 46 develop- ing states; ? sketch an agenda for t'- - : cads of gov- ernment meeting in Brussels or.~, ,Iy 16-17. The agenda reflects the continuing Euro- pean preoccupation with economic conditions. The topics include raw materials, energy, the economic situation of the community, and monetary and financial questions. The EC has been unable to agree on an energy policy. Eneroy ministers last week were deadlocked on such questions as the develop- ment of alternative sources of energy and proposals for community research and explora- tion in hydrocarbons. In addition, the division continued between France and its partners regarding the International Energy Agency--and the policies the US is recommending in that context. The French charged that the EC treaty may be violated by the Eight's participation in agency programs such as emergency oil-sharing. Despite British promises of being more amenable to energy discussions, there is little reason to anticipate that an important break- through on energy is in the offing. In the political field, the leaders at Brussels are preparing for informal discussions of the future of the community in the wake of the UK referendum. Both tl.e commission and the Euro- pean Parliament have made public suggestions for the shape and direction of European integra- tion. The only early innovation endorsed in both reports was for direct elections to the European Parliament, which is new filled by national government appointee;. European otservers almost unanimously agree that this is - r -' ? ?r r? I'dJ@ " VV EE LT rEvTEVV ' Jul 4, 75 CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 not the time for any major new move toward European union, but there is nevertheless afeel- ing that the Nine will have to take some visible steps toward that goal. The relatively smooth operaticrr of EC meetings during the past six months is largely a result of the skill and energy of Irish Foreign Minister F;tzGerald, describeu as the most bril- liant council president in recent years. Political developments in Italy are expected to pre- occupy the Italians during their six-month term in the EC presidency and may preclude com- parable performance. President Leone neverthe- less will bring coy isiderable interest and long political experience to his presidency of the heads-of-government meeting in Brussels. He is in the middle of a seven-year term of office and is to some extent above the Italian political Peking's efforts to limit Soviet influence in the Balkans have recently taken on an in- creasingly military cast. Chinese military delegations made separate trips in June to Romania and Yugoslavia. The third-ranking of the nine Chinese army deputy chiefs of staff spent ten days in Yugoslavia tour- ing military installations and holding talky with senior Yugoslav military officials, including Defense Minister Ljubicic. A second group fol- lowed a similar itinerary during a visit to Romania, including a meeting with Defense Minister lonita. Within the past year, China delivered IL-28 jet ;rght bomber aircraft to Romania and MIG-19 fighters to Albania. The delivery of MIGs was China's first to Tirana in almost five years, and the bomber shipment was the second major arms deal between Bucharest and Peking. More deals may well be in the works, partic- ularly in view of the recent Chinese visits. 25X1 The visits have spawned rumors that the Chinese are trying to drive another wed e between the Balkan mavericks and Moscow. Peking wants the Yugoslavs, Romanians, an Albanians to form a regional military alliance. Belgrade, ho,,/ever, reportedly considers such an arrangement unworkable and risky. Speculation about an alliance has in the past drawn Soviet warnings against the formation of a "pro-Chirese axis" in the Balkans. Peking, nonetheless, is likely to persist with the idea. Civilian exchanges between China and the Balkans also remain active, particul-.rly with Romania. In mid-May, Ccausescu's interior minister made an uo recedented and unan- nounced trip to Peking. Later in the month, a Romanian-Chinese communications agreement was signed, a Romanian industrial exhibit w,-.:, opened in Peking, and its represe~itative was received by Chou En-lai. Sino-Romanian trade is slated to increa:.e to $320 million this year-28 percent over the level of the 1974 'trade agree- ment. A high-level Albanian economic delegation v;sited Peking in mid-June, reportedly to discuss Chinese plans for long-term economic aid to Tirana. Vice Premier Li Hsien-nien, China's ranking economic specialist, :"as host to the Albanians. Belgrade has responded guardedly to Peking's overtures. The Chinese party's refusal to open party ties with the Yugoslav Com- munists has led many Yugoslavs to believe that Peking is merely using Belgrade. The Yugosiavs' wariness may have been the reason for Premier Bijedic's postponement of his trip to China until 25X1 25X1 Page 9 WEEKLY REVIEW) Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ;sified in Part - Sanitized Copy Approved for Release 2012/02/23 : P85T00875R001000080031-5 25X1 25X1 USSR-Somalia COVER-UP AT BERBERA The Soviets and the Somalis have tried hard to make newsmen believe there is no Soviet base at Berbera. US and foreign newsmen who visited the port within the past two weeks were unable to confirm the existence of a Soviet base, and s,aw few signs of a Soviet presence. All the newsmen were closely supervised during their visit. They werr' told some areas are Somali military facilities that are off limits to the press for security reasons. One newsman is convinced, however, that the off-limits area with bunkers, storage buildings, and antennae is a Soviet mis- sile storage and handling area. An ABC television team in Berbera last weekend was taken to what the hosts described as a Somali military installation. The journalists were not allowed to photograph or inspect the buildings because, the Somalis said, that wolild be an infringement of their sovereign rights. Earlier-on June 25-a CBS team saw few traces of Soviet personnel or equipment. The only Soviet ship in port-a barracks and repair ship- was flying the Somali flag, and Somali personnel were on deck. No Soviet personnel were seen in tF;e area identified by intelligence sources as a Soviet housing area. The CBS team team did not visit the missile storage and handling facility, apparently because team members were unaware or its exact location and did no` specifically request to bs taken there. The Soviet com- munications facility outside Berbera was operating on the .ay of the CBS team visit. d Soviet Krivak-class destroy25X1 was seen in :he port of Berbera in aerial photog- ified in pcrt a fcw days earlier are now atvthe oviet anc,iorage off Cape Guardafui "at the tip f the Horn," along with other ships from the oviets' Indian Ocean contingent. Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: Jul 4, 75 CIA-RDP85T00875 R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release facilities. [/-\erial Photography shows that Soviet ships from the Indian Ocean contingent made numerous visits to Berbera during this period, clearly indicating they have free arrecc to +i,oc? CheCkoutlAssernbly .-e and storage area ~- . ASsenlbly1Checkdet building a.. . - _ .ate ~~ a?.1-.. q,[? n :rbera missile handling and storage facility ?. Page 11 WEEKLY REVIEW Jul 4, 75 - 1111 2012/02/23: CIA-RDP85T00875R001000080031-5 25X1 25X1 25X1 An airfi;;,d under construction west of the port, when completed, will be able to handle any plane in the Soviet inventory and be far beyond the needs of the small Somali nat,inal ne or air force. Aerial photography 225X1 covered the missile handling and stor;.y? acuity, where some work was apparently in progress. The previously reported Styx missile crate is still there, as is the Styx craft- at tha Jrenchhig Bunkers ? r - rte. - - ? " Styx (SS41-2)6b1pp1ng eontalgpr -a-Drive through- ,/ banker Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 classified in Part - Sanitized Copy Approved for Release 2012/02/23 : ?RDP85T00875R001000080031-5 CSCE: TRYING FOR A SUMMIT The Western and neutral nations continued this week to resist Soviet demands that a date in July be set for a summit-level finale of the European security conference. These nations insist that agreement be reached first on mili- tary-related confidence-building measures and follow-up procedures for the conference. If these issues cannot be resolved this week, the summit may have to be postponed until late summer or the fall. The Soviets now concede that a summit on July 22-recently proposed by General Secre- tary Brezhnev-is no longer feasible, and accord- ingly they have launched a drive to commit the West to hold such a meeting before the end of July. At a news conference in Rome last week- end, Soviet Foreign Minister Gromyko suggested that foot-dragging by the NATO states was strengthening the position of several smaller states-particularly Malta, Yugoslavia, and Romania-that are seeking special concessions. He warned that any postponement of a summit beyond July would place "a grave responsibility on the West." Finland, prospective host for the summit, had said that it needs four weeks' advance notice to complete preparations for a July summit in Helsinki. The Finns have, in any case, begun preparations for a four-day summit to begin on July 28. Sharp divisions began to appear this week within the NATO caucus over several outstand- ing problems, and one new issue was raised by West Germany. Turkey, West Germany, and, to a lesser extent, the Netherlands have adopted much harder negotiating positions. The other NATO states, led by France and the UK, want a prompt decision on a date. A major obstacle to final agreement is the Turkish demand for a separate clause that would exempt certain areas of Turkey from inclusion in the provisions for confidence-building measures. The clause would state that Ankara need provide advance notice for military ma- neuvers only on its northern and western bound- aries. The Turks are isolated on this issue, but they refuse to budge, and now the Greeks have demanded a parallel exemption. Ankara's demand that the Tut-kish Cypriot community be represented in the Cypriot del- egation to the summit and the Turks' objections to the presence of President Makarios in Hel- sinki may pcse additional stumbling blocks to a summit this month. Makario; definitely plans to attend and strongly opposes the presence of a Turkish Cypriot representative. The West Germans indicated for the first time on Tuesday that they would not agree to a date until the final text on confidence-building measures and on overall principles governing relations among states is agreed upon. Bonn's motivation for a tougher stand on these issues stems in part from increasing domestic political pressure for better terms in the final agreement. Substantive negotiations in Geneva, mean- while, have proceeded at a faster pace and have even required weekend sessions. Ten+ative agree- ment was reached on some aspects of confi- dence-building measures. The West is hoping that the Soviets' desire for an early summit will prompt them to make a final concession on the areas covered by this agreement. Progress was made early this week on nego- tiations concerning follow-up meetings to the conference. Most delegations appear willing to support a solution along the lines of a recent Swedi:-h proposal that senior r`fficials meet- beginning in 1977-to assess how the confer- encee's decisions have been implemented and to ensure "continuity of the multilateral process." This provision would keep alive the possibility of another conference. The French, however, continue to strongly oppose any wording imply- ing continuity of the conference p, oceedings. On Monday, final accord was ruched o guidelines for freer movement of ideas and people between East and West. Moscow also appears willing to go along with a Western re- quest for a disclaimer to the effect that the results of the conference are politically, but not Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : ' 4, 75 CIA-RDP85T00875 R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : Moderate members of Prime Minister Rabin's ruling coalition this week stepped up their effort to persuade him to consider further concessions to Egypt. They are afraid an un- compromising stand will jeopardize Israel's close relationship with the US. The moderates' drive is spearheaded by the leftist Mapam Party, supported by the small Independent Liberal Party and some leading members of Rabin's Labor Party. The Laborites reportedly include Foreign Minister Allon and Finance Minister Rabinowitz, as well as Yitzhak Navon of the party's conservative Rafi faction, which is headed by Defense Minister Peres and Moshe Dayan. Navon told reporters on Junr 30, following Rabin's briefing of the Kncs_,et's Foreign Affairs and Defense Committee on the negotiations, that he considered Israel's security more de- pendent on close ties to the US than on a "single mountaintop or one single place." Israel, he remarked, won wars in 1948, 1956, and 1967 without the Gidi and Mitla passes in the Sinai and had been unable to prevent a war in 1973 when it held them. Navon was probably echoing a major argument used by the moderates to buttress the case for concessions. Some press reports suggest that Israeli ad- vocates of greater flexibility are arguing that Tel Aviv should be guided by what it can get from the US-not Egypt-in return for giving up the passes. Specific objectives being discussed include: ? A two-year US ecu,iomic aid commit- ment to Israel worth $2 billion. ? Military aid to meet the major part of Israel's requests over the next two years. a A public statement that the US would support Tel Aviv if the Egyptians violated an agrcament. Prime Minister Rabin Rabin held a series of meetings this week with Israeli political 'riders from various parties and the Labor Knesset faction to explain the state of negotiations. The Israeli press speculates that Tel Aviv will make no basic decisions on how to proceed until the middle of July. For one thing, Rabin probably wants to get a better reading of just how far Washington and Cairo are prepared to go to meet Israeli demands in order to prevent another breakdown of the negotiations. An article by a commentator close to Peres, for instance, suggests that conservatives in the cabinet are arguing that there may be an Page 13 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : CIA-RDP85T00875 R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 element of bluff in the US position, and that this could be smoked out by Tel Aviv's demand for further "clarifications" of the Egyptian posi- tion. The commentator claims that Tel Aviv thinks Washington and Cairo are extremely an,.uus to make progress before Secretary Kissinger meets Soviet Foreign Minister Gromyko late next week arid before Egypt cele- brates its Revc,Iution Day on July 23 and the UN mandate in tree Sinai expires on July 24. As might be expected, the rightist Likud bloc has come out strongly in support of Israeli retention of the eastern end of the passes and has urged Rabin to stand firm. The Likud has also revived its call for a national unity govern- ment. EXPECTATIONS RISING IN CAIRO A widespread belief in Cairo that Washing- ton i.; exerting heavy pressure on Israel for prog- ress in negotiations has evoked difrering ideas among media commentators on the speed with which the US should produce results. In all cases, however, there appears to be a hich degree of expectation that the US will indeed follow through either witn successful negotiations for an interim Sinai agreement or, failing that, with a declaration of Washington's ideas on the shape of a fina, settlement. An Al-Ahrum editorial writer commented last week that, with US-Israeli differenc's now out in the open, the US can rro longer delay the conclusion of its policy reassessment and should take clear arid decisive steps now to bring Tel Aviv into line. Other commentators have adopted a somewhat more patient attitude and indicated a confident belief that the US will in fact take such steps in the near future. Al Juruhurlt'u's diplomatic editor, who has close ties to the Sadat regime, cited several recent US statements to support her belief that, if Wash- ington cannot produce another disengagement in the Sinai, it will, on the basis of its policy reassessment, still maintain pressure on Israel for an overall settlement. Page 14 SOVIETS PLAYING COOL Moscow has adopted an aloof attitude to- ward the Arab-Israeli situation while it awaits the results of US efforts to achieve a new Egyptian-Israeli disengagement agreement. The Soviets are clearly not enthusiasts about the current US initiatives, but they have withheld the embittered criticism of step-by-step diplo- macy they employed in the past. Moscow's forbearance results partly from its recognition that some sort of diplomatic progress is essential if the Arab-Israeli dispute is not to boil over. The Soviets do not want to be seen as obstructing diplomatic progress, and they realize they have little to offer, in view of their own failure this spring to organize Geneva conference. The Soviets also hope that ultimately they can gain at least the appearance of participation in the diplomatic process. They trope to make some progress on this and to gain a clearer reading of US intentions when Foreign Minister Gromyko and Secretary Kissinger meet in Geneva next week. Perhaps in anticipation of that session, Politburo member Suslov put in a pitch for "coo; dinated action" on the Middle East when he net with group of US Senators on Monday. Indeed, the Soviets, who have, riot given up talking quietly about a Geneva conference, have indicated than they could live with a US- sponsored agreement that was concluded under the umbrella of Geneva. In the meantime, the Soviets continue to drop reminders that they have other cards to play. Party Secretary Ponornarev's visit to Damascus last week, for example, seemed timed to overlap Syrian Foreign Minister Khaddam's visit to the US. The Soviets are also once again pushing the Palestinian issue. One senior Soviet diplomat claimed lie was "astonished" that the US seemed to be ignoring the question. Such remarks imply that Moscow may intensify its support of Palestinian demands if the US con- tinues to exclude Moscow from the settlement WEEKLY REVIEW Jul 4, 75 Part - Sanitized Copy Approved for Release 2012/02/23 : CIA-RDP85T00875RO01000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 LEBANON: A GOVERNMENT AT LAST The heavy fighting that rocked Beirut for nine days diminished sharply following the installation this week of a new cabinet and the arrrrouncement by Prime Minister Rashid Karami and PLO Chairm,,n Yasir Arafat that they would use force, if necessary, to implement a cease- fire. The resolution of Lebanon's worst political and security crisis since 1958 has left the Prime Minister---and Sunni Muslims in general- in a strong political position, highlighted the reduced effectiveness of President Franjiyah and the right-wing Phalanges Party, and reflected the increased ability of radical groups to undermine public order. The six-man ''nonpolitical" cabinet installed orr July 1 includes neither Phalangists nor Socialists. Its makeup represents it victory for Karami and a defeat for Franjiyah, as lie and other right-wing Christian leaders had held out for more than if month for participation by the Ph al a rigisls. Phalangist lender Pierre JurrrayyiI has !rot coil) rrret)ted publicly on the new government, but he is reported to have promised privately that the Plialarrgist militia will cooperate in implernerrtinq the cease-fire. fhe new cabinet meets Jurnayyil's demands that it be matte tip primarily of conservative representatives of the county's several religious groups and that former president Shanrun, the leader of the National Liberal Party, he given the powerful Inferior Ministry, which has respomibiliiy for internal seconrity arid Lebanese-Palestinian rela- tions. Major Lebanese and Palestinian lenders endorsed a cease-fire immediately after the new government was installed; Karami and Arafat 111r`ked gunman se, ks cover during recent civil strife in ficirut Page 15 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 announced shortly thereafter their determina- tion to 01-force it. The agreement between Karami an(' Arafat negotiated in it meeting with Syrian Foreign Minister Khaddain, senior Lebanese army officers, and fedayeen leaders, provides that the security forces will move into all areas of the city, arrest snipers and kidnapers, exercise restraint "even when fired upon," and clear the streets of barricades and arms. The cease-fire took hold almost irrunediately, a I though sporadic firing by fedayeen and Lebanese radicals continued in some areas. These radical clnrnents--which in addition to the small fedayeen groups included Lebanese Communists, members of the Syrian Social Na- tionalist Party, and several Nasirist groups-- played a more important role ill the most recent fighting than during the hostilities of May and June. They were not supported by the major fedayeen groups, which stayed on the sidelines, but were emboldened by vastly increased Libyan--aril to it lesser extent Iraqi--support. The security services this week made an unusually strong effort to flush out snipers belonging to the radical groups. This attempt was only partly successful, however, because government forces tended to stick to the relative security of their armored vehicles and tried to dislodge the snipers with heavy weapons. This resulted in con,irlerahie property dam_-.,,, many civilian casualties, and some disaffection within the security service. The limited success of the security services' initiative, the government's extreme reluctance to call in the art-n-, at)(] the alarming spread of violence to towns outside Beirut all served to prompt Karami and Franjiyah to paper over their differences. The compromise government they create, however, will be short-lived. If it is not expanded to include representatives of all political factions within two or three months, as has been promised by Karami. violence it almost SY9IA: MISSILES CONFIRMED Equipment associated with the Scud sholt- range ballistic-missile system has been photo- graphed in Syria for the first time. Coverage of raid-June showed one Scud tansporter-erector- launcher and nine Scud resupply transporters near Al Qutayfah, some 20 miles northeast of Damascus. No missiles were seen on the phot.og- raphy. Clandestine s rcn"ces have been reporting the presence of Scuds in Syria for more than 18 months. The presence of nine resupply trans- porters suggests that at least one Scud brigade of at least nine missile launchers has been formed. The Scud has a range of about 180 males and Port Said 5y rrn At L?UtayU, DAMASCUS Haifa. 1 i?Dar'a ?.r' . Bir Jifjafah rrcnr -Z Ridi Pass Suez' Mill, Pass ` I rJ 4 / AMMAN ?Jerr salem BEIRUT ' r 25X1 25X1 Lobonon I Page 16 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Moroccan-inspired violence in Spanish Sahara and in Spain's enclave, of Ccuta and Melilla, along with growing friction between Rabat and Algiers, have increased tensions among the parties disputing the 'suture of Spanish Sahara. The rising scale of violence and the frustrations Madrid has encountered in trying to arrange quadripartite talks with Morocco, Mauritania, and Algeria have probably increased Spain's desire to withdraw from the Sahara. During the past month, Morocco has in- creased its military probes into Spanish Sahara, provoking several clashes with Spanish forces. Five Spanish soldiers were killed on June 24 when their vehicle hit an antitank mine in the vicinity of an earlier Moroccan incursion. The next day, Moroccan troops who had crossed into the Spanish dependency fired on two Spanish planes flying a reconnaissance mission near the border. The Moroccans withdrew after a Spanish army unit engaged them with mortar fire. Last weekend, two bombs exploded in Ceuta and one in Melilla, killing at least three Moroccans and one Spaniard. According to press accounts, Spanish officials temporarily closed the border between Ceuta and Morocco and detained some 100 Moroccans for interrogation. The Moroccans apparently hope that in- creasing military f:-essure will induce Spain to negotiate a cession of Spanish Sahara to Morocco. If the level of violence continues to rise, however, Spain nay respond more vigor- ously and show less concern for Rabat's interests in the Sahara. Madrid is especially sensitive about Ceuta and Melilla, which-unlike the Sahara-it is unwilling ;o give up. Saharans, if given a choice, would opt for independence. Toward that end, Algiers is back- ing a pro-independence Saharan party, the Polisario Front, which has emerged as the dominant indigenous political force in Spanish Sahara. In addition, Algiers has brought home air and ground units stationed in Egypt since October 1973 and may have moved some local army units closer to the Moroccan border. These limited movements seem to be an attempt to exert psychological pressure on Morocco, whose forces would be no match for Algeria's. Spain, in another effort to arrange multi- lateral talks, has invited Morocco, Mauritani,n, and Algeria to meet in Madrid on July 9. If this effort fails, the Spanish government says, it will seek UN Secretary General Waldheim's help in arranging a conference under UN auspice's. At the same time, Spain is attempting to build a political structure in the Sahara to facilitate a unilateral withdrawal if negotiations break down. The governor general of the ter- ritory announced last week that he had invited various political groups to participate in setting up a commission to receive the "transmittal of powers.'' Despite guarantees of Madrid's neutrality toward ali Saharan groups, the r'olisario Front did not respond to the invita? tion, presumably because it considers itself the sole representative of the Saharan people. Cape Verde Islands BECOMING INDEPENDENT The Cape Verde Islands archipelago, a Portuguese colony since the 15th century, be- comes independent on July 5. The island group is expected to form an early political union with the Republic of Guinea-Bissau. Algerian opposition to Morocco's claim to the territory has been the chief stumbling block to negotiations. Morocco, for its part, is more opposed than ever to Algeria's inclusion in any negotiations on Spanish Sahara. The Algerians would like to see a refer- endum on self-determination, as they believe the The Cape Verde National Assembly, elected on June 30, is drafting a constitution and working (All details for the union with Portugal's former dependency on the West African mainland. Guinea-Bissau received its independence last September, following more than a decade of insurgency led by the African Page 17 WEEKLY REVIEW Jul 4, 75 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 sified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Party for the Independence of Portuguese Guinea and Cape Verde. The party is the dom- inant political force in 5oth areas. Most of its leaders are Cape Verdoans, although its military force consists mainly of na'.ives of C,ainea- Bissau--the only area in which the party mounted a guerrilla effort. The islands, which were uninhabited when discovered by Portuguese explorers, were ini- tially valued by Lisbon as a secure base from which to administer its colonizing activities on the African continent. The archipelago soon be- came a major staging area for tha Portuguese slave trade; some slaves from the mainland be- came permanent residenis, and their descend- ants account for the bulk of the present popula- tion of 280,000. In later years the Portuguese relied heavily on Cape Verdeans, because of their longer contact with Portuguese language and culture, to help administer Guinea-Bissau, Angola, and Mozambique. Cape Verde and Guinea-Bissau were under joint territorial gov- ernment until 1879. The islands, situated about 300 miles west of Senegal, were the poorest of Portugal's over- seas territories. The islands are of volcanic origin; water is scarce, and farming is extremely difficult. The 7 percent of the island that. is arable supports over 80 percent of the popula- tion on a subsistence level. The islands do have two valuable economic assets resulting from the importance they had to Portugal as a way- station to Africa-an international airport and a modern harbor. The harbor is a major haven for Portuguese and foreign fishing fleets. The two facilities should bring in substantial income. Although the island group will probably have a degree of local autonomy in any union arrangement with Guinea-Bissau, it will basically be little more than an appendage of the more populous mainland state. Heretofore, the islands have been heavily dependent on Portuguese aid; during the oast 18 months, Lisbon provided some $60 million in financial assistance. Lisbon has indicated that it will be unable to provide financial assistance after independence, although it will probably continue to underwrite some technical and cultural assistance in the form of teachers, doctors, and agricultural experts. To a large extent, the islands will now be dependent for economic assistance on Guinea- Bissau, whose own resources are extremely limited. The African Party is actively seeking financial assistance for both areas from a wide variety of international sources, including the US. islands and that they will follow a nonaligned Both the Soviet Union and Cuba were major supporters of the party during the insur- gency, but there are no indications that this support has bought them special favors from the Bissau government. Moscow is continuing to supply Bissau's military needs, and Soviet del- egations have visited Bissau to discuss future military and technical aid. The prospective union government will probably allow the Soviets landing and bunkering rights at the islands' port and airfield, but party leaders have declared publicly that thcy will riot allow a foreign military presence in Guinea-Bissau or the Page 18 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 1 LAOS: THE LAST STRAW? After a brief lull, the communists have renewed their campi.igo of harassrni-a arid intimidation against the US mission in Vientiane. A mi%ed group of Pathet Lao troops and police as well as student and other civilian demonstrator's still occupies tree three US in- stallations they seized before dawn on June 28. The installations include the USIS headquarters in downtown Vientiane and the US embassy's general services compound and nearby US residential housing area on the capital's out- skirts. A fourth installation--the USIS ware- house-was seized on Monday. All Americans have been evacuated from the various faci,ities. According to US officials, the drmon- strator, have plastered highly inflammatory wall posters around all of the installations. S Mme of the posters call for the immediate departure of all "American imperialists" from Laos and threaten harsh consecit.ences otherwise. No violence or serious property damage has oc- curred thus far, although US officials have noted that for the first time since the Pathet Lao - inspired demonstrations against Amercans began nearly two months ago, civilian protesters are brandishing weapons. There are strong indications that a major demonstration against the US embassy, orig- inally scheduled for June 30, is now on tap for the holiday weekend. Meanwhile, the president of the leftist Lao Student Federation, the acti- vist group that has spearheaded most of the recent anti-American shenanigans, took a very hard line toward the US at a press conference earlier this week. He threatened that, if the US refused to continue assistance to Laos in the form of war reparations and foreign exchange support, the coalition government "would agree with the federation's desire to break diplomatic relations." Protests by the US mission to senior conmir'nist coaliticn authorities over the latest anti-American harassment have fallen on deaf ears. Pathet Lao Deputy Prime Minister Phounri Vongvichit-who along with titular Lao com- munist leader Souphanouvong returned to Vientiane last weekend following a three-week Central Committee strategy session in Sam Neua--has been "too tired" to discuss the matter with the US charge. Phourni's alleged fatigue could be politically motivated and de- signed to further exacerbate the already severely strained Lao-American relationship. It could also be the result of a mild heart attack that Prime Minister Souvanna Phouma claims his deputy suffered while in Sam Neua. British Ambassador Davidson, who con- ferred with Phoumi on July 1, has lent sub- stance to Souvanna's claims. Davidson said that he was "shocked" by Phoumi's appearance, that the deputy prime minister had lost weight, moved very slowly, and obviously was riot well. Without identifying his malady, Phoumi told the ambassador that he had been hospitalized in Sani Neua for a week and that lie planned to take a one to two month rest. He also hinted that one of his "colleagues'' from Sam Neua might come down to Vientiane to take charge of the Foreign Ministry. Steps r antinue to be taken to trim the mission slift. Some 19 nonessential embassy employees were temporarily dispatched to Thai- lard early this week, leaving only 22 official US personnel in Vientiane. Some 57 private Amer- Page 19 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Prime Minister Whitlarn's firing of Deputy Prime Minister Cairns has put the Labor govern- ment under the most serious strain since it took office two and one-half years ago. An early national election-a distinct possibility-would almost certainly result in a sweeping victory for the Liberal-Country opposition. Whitlam dismissed Cairns on Wednesday, saying he was dissatisfied with his deputy's ex- planation of questionable financial dealings. The Prime Minister obviously felt that Cairns had committed inexcusable improprieties---despite the fact that some of the evidence that appeared in t1-e press is known to have been fabricated. Labor's stunning loss of a traditional Labor district in a Tasmanian by-election last weekend is adding to disarray in the party. Many Labor- ites blan?- Whitlam for the defeat. Tensions may reach the breaking point if Whitlam now tries to push the party caucus to replace Cairns as deputy party leader when it meets on July 14. Page 20 WEEKLY REVIEW Jul 4, 75 assified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Prior to Cairns' dismissal, the opposition Liberal-Country coalition did not appear to have any intention of using its parliamentary advan- tage to push for national elections. Liberal leader Fraser has said 'fiat he was content to let Labor ride out the remaining two years of its term unless "unforeseen and reprehensible" events occurred. He is now under intense pres- sure by his colleagues to go for early elections and may decide that he cannot afford to pass up the opportunity to force the government to the polls. Public disaffection with Labor was made abundantly clear by the defeat in Tasmania. The margin of that defeat suggests that recent public opinion polls, if anything, understate the trend against Labor. Labor's poor electoral showing plus the party imbrog;io has bolstered the Liberal-Coun- try coalition's confidence that it could handily win a national election. The timing depends on the opposition's decision that it is ready to accept responsibility fcr Australia's deep eco- 25X1 25 The North Koreans and the Chinese, both publicly and privately, continue to emphasize that Pyongyang's intentions are peaceful. In speeches and commentary marking the 25th anniversary of the Korean war last week, the Ncrth Koreans pressed this theme, stating flatly that talk about Northern invasion plans was "ridiculous" and that Pyongyang has no intention of using force of arms to reunify the country. The North Koreans have been making much the same pitch in conversations with for- eign diplomats. Foreign Minister Ho Tam re- cently acknowledged to Australia's Foreign Min- ister Willesee in Pyongyang that reunification was not an early prospect and that a new Ko- rean war was not likely. sified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 2bAl Willesee was given the same message in Peking. Chinese Foreign Minister Chiao Kuan- hua played down Kim II-song's visit to Peking in April, claiming that it had been planned months in advance and only "fortuitously" coincided with the collapse of Indochina. Chiao expressed confidence that North Korea would not attack the South. Chinese officials in Europe, at the UN, and in other capitals have emphasized that, although reunification of Korea is a matter for the Ko- rean people to decide, Peking urged a moderate course during Kim's visit. Moreover, Chinese propaganda has continued to stress "peaceful" reunification--a line Peking has highlighted since the Kim visit. North Korean propaganda continues to play some militant themes, but with less promi- nerce since Kim's foreign trip last month. The statement first introduced by Kim II-song in Peking-that the North would not stand idly by in the event of an uprising in South Korea-still appears, as do warnings that the North will meet any aggression from the US and Seoul with vigorous revolutionary war. But Pyongyang almost certainly recognizes that Kim's threaten- ing tone at the outset of his visit to Peking was counterproductive, as it encouraged a closing of ranks in South Korea-quieting President Pak's political opposition-and prompted strong ex- pressions of support for Seoul by high US officials. The current stress on peaceful intentions is probably also aimed at increasing diplomatic support for North Korea at the conference of nonaligned countries this fa!I. Page 21 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Since seizing Saigon in April, the commu- nists have been busy courting international recognition. The UK, the latest country to an- nounce diplomatic ties with the Provisional Rev- olutionary Government, was the 30th to do so. A number of others have expressed an intention to recognize the new administration; still others, such as West Germany, maintain that ;.o ii,t(-r- ruptiori in formal relations occurred. Not even the communists' staunchest allies during the war have yet been allowed to estab- lish any sort of diplomatic representation in Saigon. Rumors are now circulating in Saigon and Hanoi, however, that the communists may soon allow some diplomats to take up residence in the South, possibly as early as August. A. French correspondent quoted an unidentified high-ranking source in Saigon on June 22 as saying, "A certain number of foreign countries will be able to have diplomatic relations in the South." The source added that "later on"- presumably after reunification-these missions "will become consulates." severe countries have had discus- sions with communist officials on the practical problems of setting up diplomatic missions in Saigon. The communists have indicated that the missions should be small and be headed by a charge d'affaires. The timing of a decision to permit foreign diplomats in Saigon may ')e linked to the com- munists' evaluation of the progress being made toward maintaining order and providing food, jobs, end homes for the large number of un- employed including former soldiers and civil ser- vants and persons displaced during the war. Allowing foreign diplomats could also be a harbinger of a transition to a civilian administra- tion from the military committees (headed by Northern generals) that now run Saigon and other large urban areas. If the communists have adopted a more liberal attitude toward establishing relations with other countries, this has not yet been dis- played in negotiations with Japan. the communists- 0 North Vietnamese and Viet Cong-have toughened their conditions for economic assist- ance and diplomatic representation. Hanoi re- portedly is now insisting that Japan complete aid negotiations before embassies in the two countries are opened. The Viet Cong for their part nave indicated that countries that sup- ported the Tnieu government must provide eco- nomic assist?nc2 as a condition for diplomatic representat on in Saigon. 25X1 Hanoi's need for economic assistance and the unlikely prospect that China and the Soviet Union will maintain previously high levels of aid are the principal factors behind Hanoi's tough- ened position. Whether or not this interpreta- tion is accurate, Hanoi's leadership has probably concluded that the Japanese want a toehold in Vietnam badly enough to stand bein,, squeezed a little harder. Before the war ended, the North Vietnamese had bargained the amount of JapN- nese aid upward from $17 to $41 million. We continr-e to pick up signs that both North and South Vietnam plan to seek admit- tance to the UN this fall. The communists prob- ably see certain practical advantages in separate representation. For one, the Sn" h Vietnamese might be able to succeed to positions held by the Thieu government in various UN specialized agencies and other international organizations. Allowing a limited diplomatic presence in Saigon and seeking separate representation at the UN would point up the gradual course the communists apparently intend to follow in re- unifying the two Vietnams. The unidentified source of the French correspondent stated that the process would be completed by the end of 1976 at the latest. The source also said that Hanoi would be the unified country's political capital and Saigon its "economic capital," a distinction that has also been made in the com- 25X1 25X1 Page 22 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 OAS: TANGLED AGAIN Conflicting principles once again threaten to leave the OAS awz.sh in rhetoric and enable to come to grips with practical issues. Two items currently before the body illustrate the divisions that plague inter-American affairs: ore pits the rest of the hemisphere against the US; the other evokes an ideological conflict among the Latins themselves. divisions. Peru has been lk.ss willing than the other sponsors of the resolution to move to a more reasonable position, so that rhetoric will probably outweigh practicality in the final declaration. Nevertheless, the interest by the majority in accommodating the US point of view to some extent seems indicative that dialogue is still alive in the OAS. The question unaer discussion at OAS headquarters in Washington, "illicit corporate payments," opened as an accusatory exercise reminiscent of the OAS blast against the Trade Reform Act some months ago. Six govern- ments-Peru, Ecuador, Venezuela, Hondures, Bolivia, and Costa Rica-all stung by revelations of bribery in business dealings, sponsored a resolution in effect condemning transnatioral companies as corrupting influences and insisting on the need for a code of conduct for such firms. Despite the fact that the payoffs were revealed through US investigations, the transna- tional companies remain for the Latins a major symbol of US exploitation and intervention. The distinction between US official and US private activity remains blurred. Latin govern- ments ago prone to exaggerate the political and economic power of large companies and to feel unable to protect their national interests in dealing with them. These governments wan; what amounts to corrective intervention by the US-a US monitoring system that would "con- trol" US investors abroad. The devising of a code of conduct has been under study for some time in the UN and other international bodies, but an inter-American effort to this end languished as Latin-US affairs turned again to- ward an adversary relationship. Revival of the issue via their polemical resolution was another sign of the Latins' con- viction that the US and other developed nations can be influenced by a constant barrage of criticism from the Third World. Some govern- ments, however, are beginning to respond to arguments that the flow of unenforceable declarations from the less developed countries is preventing serious efforts to bridge international San Jose, Costa Rica, will host another OAS meeting which will begin on July 16 and run for perhaps two weeks. The issue here will be specifically to amend the inter-American security elliance, the Rio Treaty, but the gut question is that of the Cuba sanctions. One of the amendments likely to pass will make it possible for a majority, instead of two thirds, to rescind sanctions. Some governments would like to follow through by converting the assembly into an "Organ of Consultation"-foreign minis- ters or their designates acting under the treaty- that would terminate sanctions against Havana. Chile and other anti-Castro governments, how- ever, will probably block such a move. Santiago, for example, will not send its foreign minister, and it plans to empower its delegation to deal only with the formal Rio Treaty agenda. The vaunted OAS principle of ideological pluralism remains an abstraction that many governments refuse to accept in the case of Castro's Cuba. The Latins on both sides of the Cuba prob- lem have faulted US "neutrality" on the issue. Those preferring to normalize relations with Havana are angry at the US for failing to go along with the majority at Quito last autumn, a stand which they believe denied them the chance to dispose of this contentious issue. Neither side is likely to be wholly satisfied at the outcome of the San Jose conference. The Latins favoring normalization will probably call for yet another meeting and vote on a resolution that will, at a minimum, leave governments with "freedom of action" on the Cuba matter-a freedom many OAS members have already exercised independently by establishing rela- Page 23 WEEKLY REVIEW Jul 4, 75 ssified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 fied in Part - Sanitized Copy Approved for Release 2012/02/23 : 35T00875 R001000080031-5 Textile workers demonstrate outside the headquarters of the General Labor Confederation Argentina LABOR'S DEMANDS UNDERMINED Labor's announced pledge to respect the authority of President Peron constitutes a momentary but significant victory for the gov- ernment in its continuing conflict with workers. For the moment at least, the leaders of the Peronist labor confederation are unwilling to risk calling the workers into the streets again for the tinal showdown, as they had threatened. The President's unexpectedly strong stand has caught the labor leaders off guard. They had apparently assumed that the government would yield easily, but the administration's persuasive economic ration. e for overturning massive pay hikes negotiated last week has considerably lessened their ability to act. The longer the union chiefs hesitate, the more untenable their position is likely to become. At the direction of chief presidential adviser Lopez Rega, the government sought first to undermine the authority of the labor leaders and now seeks to divide the whole labor move- ment. -1 itc administration came out against the wage hike:, only after many, but not all, of the important unions had negotiated new wage con- tracts. The government thus sat union against union and demonstrated once again to the workers the'Ir leaders' inability to deliver. Against this setting, the Peron administra- tion has conic forth with a proposal to increase wages by 80 percent, in installnments. This will probably appeal to those workers whose new contracts were still being negotiated, but will not assuage those who had obtained increases of 100 percent or more. The President has also announced a doubling of certain benefits that apply primarily to workers at the lowest and of the wage scale. Both the President and Economy Minister Rodrigo, a protege of Lopez Rega, have made tough, well-thought-out speeches cataloguing the nation's many economic ills, pointing out that austerity is in order and that the present administration-the constitutional heir to the magical Peron legacy-is uniquely qualified to deliver it. The stress on legitimacy is designed to discourage military intervention; indeed, most assified in Part - Sanitized Copy Approved for Release 2012/02/23: Jul 4, 75 D P85T00875 R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 ' officers are known to favor the maintenance of constitutional rule if at all possible. In a related move, Lopez Rega has taken another step toward building greater control over the nation's security apparatus. Last week, the government created a new post within the Interior Ministry-that of under secretary for domestic security-and filled it with a former federal police official. The new official will coordinate all government antisubversive efforts. The appointment came before the current crisis and could have been designed to give the govern- ment an alternative means of dealing with potential labor violence, given the military's unwillingness to 'ntervene against workers and on the side of Lopez Rega. If the government wins its contest with labor, the main victor will be Lopez Rega; his mastery of the political situation will then be virtually complete. A fragmented, unrestrained labor movement, however, could prove more dangerous in the long run than the somewhat recalcitrant but still relatively disrinlinari fnrro HONDURAS: PEASANT UNREST' Peasant unrest is giving the government of President Melgar, in office only since April, its first hard test. Army troops last week broke up a hunger march in the interior of th,: country by peasants of the National Union of Campesinos, killing at least five persons in the clash. Many more deaths may have gone unreported. The march was intender] to force the government to comply with peasant demands for a more rapid distribu- tion of land and the release of imprisoned campesinos. Police raided the peasants' union head- quarters in Tegucigalpa and arrested its leaders. Three US Peace Corps volunteers and several Catholic priests of US nationality were detained by police. The Peace Corps volunteers were later released. By week's end, army troops had stopped the marchers and sent them back home, but the peasants have vowed to resume their protests, which may include further attempts to take over privately owned lands. Melgar apparently received authority to crack down from the 26-man Superior Defense Council, the policy-making body dominated by lieutenant colonels who ousted president Lopez in April. Their action was an attempt to show that the new government is not weak or vacil- lating, as its critics have said. Despite the quick and harsh response, peasant unrest still poses a problem for Melgar. Committed like his predecessor to the cause of agrarian reform, he has to steer between the demands of the peasants and the landowners. Melgar is regarded as a conservative with ties to landowner and business circles, which have opposed land reform. Although the council appears to have given the President the authority to get tough this time, it is not at all clear that he will be allowed to dismiss the peasants' demands out of hand. Pressures from organized peasantry for a speed- up in agrarian reform are likely to continue, and the lieutenant colonels, probably fearing that more repression would bring the military into disrepute, are likely to tell Melgar that some movement toward more rapid land reform is necessary for the good of the country. COLOMBIA: SECURITY EXTENDED President Lopez has extended to the entire country the state of siege he imposed in three widely separated areas in mid-June. Continuing studont demonstrations, protests against economi : hardships, and the recent outbreak of orerrilla activity have obliged Lopez to move to maintain order. By im- posing martial law and all but abandoning his policy of broadening civil liberties, Lopez is almost certain to face the most serious political challenge of his ten-month Page 25 WEEKLY REVIEW Jul 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : CIA-RDP85T00875 R001000080031-5 PERU: NAVY VERSUS VELASCO The Peruvian navy's success last week in forcing President Velasco to oust Navy Minister Guillermo Faura is another indication of Ve- lasco's declining power and the concurrent rise of Prime Minister and Minister of War Morales Bermudez. The navy, Peru's most conservative armed service, has generally been apprehensive about Velasco's leftist policies. Furthermore, most naval officers, particularly in the junior and middle grades, had opposed the blatantly pro-Velasco Faura since he became minister last January. The removal of Faura and his replacement by moderate Admiral Augusto Galves Velarde indicate the growing influence of the moderates in the government. The air force demonstrated substantial solidarity with the navy by looking the other way when the navy used the implicit threat of force to bring Faura down. Even the army, thus far Velasco's major source of sup- port, remained neutral during the incident. Morales Bermudez continues to avoid any active move to supplant Velasco. His charac- terization of the Faura affair as an internal naval problem, however, may encourage his moderate followers to whittle away at Velasco's power on their own while he solidifies his position. The showdown with the navy--indicative of division and dissension within the military- forced Velasco to make a show of unity within his government. To this end he has decided to keep two radical generals, Graham and Rod- riguez, who may have been plotting against him and were reportedly on their way out. The Presi- dent also emphasized strongly to his cabinet that Morales Bermudez is hic successor. Declassified in Part - Sanitized Copy Approved for Release 2012/02/23 : 4, 75 CIA-RDP85T00875 R001000080031-5 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5 Declassified in Part - Sanitized Copy Approved for Release 2012/02/23: CIA-RDP85T00875R001000080031-5