WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080047-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 30
• Document Creation Date: December 27, 2016
• Document Release Date: May 13, 2010
• Sequence Number: 47
• Publication Date: October 24, 1975
• Content Type: REPORT

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Top Secret
Weekly Review
Top Secret
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The WEEKLY REVIEW, issued every . riday morning by the
Office of Current Intelligence, reports and analyzes signifi-
canT developments of the week through noon on Thursday. It
frequently includes mutericl coordinated with or prepared
by the Office of Economic Research, the Office of Strategic
Research, the Office of Geographic and Cartographic
Research, and the Directorate of Science and Technology.
Topics requiring more comprehensive treatment and there-
fore published separateiy as Special Reports are listed in
the contents.
Spain: Facing the T-an, tion
USSR-France: A Chilly Visit
Europe: Communist Party Conference
Romania: Merchant Fleet Expansion
NATO-Greece: Talks To Begin
9 Egypt-US: Sadat Visit
10 Spanish Sahara: Moroccan March
12 Lebanon: No Solution
14 Syria-Israel: Golan Tensions
I'/ Angola: Dim Prospects
16 The Tan Zam Railroad Opens
17 Canada: Trudeau Challenged
18 SELA Created
19 Bolivia-Chile-Peru:
Talk, No Action
20 Chile: Security Crackdown
21 Argentina: Peron's Return
22 Honduras-El Salvador:
Treaty Unlikely
23 Brazil: Oil Decision Unpopular
27 China's Computer Industry
26 Laos: The Communists Celebrate
24 The Korean Question at the UN
25 Australia: Political Crisis
publication are welcome. They may be
directed to the editor of the Weekly Review,
CONTENTS (October 24, 1975)
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
EAST AS I A
PACIFIC
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SPAIN: FACING THE TRANSITION
The outlook for General Franco's survival
from the severe heart attack suffered e, rlier this
week remains guarded because of the danger of
another attack that is likely to be fatal. Even if the
82-year-old leader should linger on, he will lack
the stamina and ability to fulfill his duties.
The government decided to play down the
seriousness of Franco's.iilness in its public an-
nouncements, presumably to reduce pressures
for an immediate turnover of power to Prince
Juan Carlos. But private assessments emphasize
the damage to his heart is irreversible.
Prime Minister Arias and Prince Juan Carlos
reportedly favor an immediate and permanent
transfer of power-with or without the ailing
chief of state's consent. Earlier, Franco reportedly
had proposed a temporary transfer such as was
Franco and Juan Carlos
made during his illness in 1974, but Juan Carlos
held out for a permanent transfer. Franco
reportedly is no longer considering any transfer
of power because he considers himself sufficient-
ly recovered to continue.
There is evidence that some military leaders
are becoming less willing to allow the situation to
drift indefinitely. The threat posed by Moroccans
toward Spanish Sahara, the recer' wave of
terrorism, and European criticism of Spanish
justice are strong reasons for settling the transfer
of power to avoid a power vacuum. But most of
the military leaders are still unwilling to take the
responsibility of telling Franco he must step
down.
If Franco clings to office and refuses to
transf his powers to Juan Carlos, pressures will
mount for the government to invoke the con-
stitutional provisions declaring the chief of state
incapacitated and invest Juan Carlos with these
powers. These procedures require recognition of
the chief of state's incapacitation by a two-thirds
majority of the cabinet, of the advisory Council of
the Realm, and of the legislature. Prince Juan
Carlos would then be sworn in as king within
eight days. If Franco dies or agrees to a transfer,
the Prince would automatically succeed and be
sworn in, also within eight days.
Although Prime Minister Arias is not required
to resign-his five-year term expires in 1979-,he
has said privately that he will do so. This would
most likely be a courtesy resignation that the new
king wc;ilc] refuse, thereby opting for continuity,
at least in the short term.
The overriding factor in the transition will be
the wish to preserve the image of national unity
by following the precise terms for the succession
devised by Franco. It is unlikely that any impor-
tant political sector will question efforts to
preserve this image of national unity. In the event
terrorists and disaffected elements try to prevent
an orderly transfer of power, the government,
backed by the Civil Guard, is expected to be able
to preserve order. 25X1
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USSR-FRANCE A CHILLY VISIT
The Soviet-Frencl. "special relationship"
looked a little frayed around the edges at the end
of French President Giscard's four-day visit last
week. Ther' apparently was less than met the eye
to the mid-visit changes in Giscard's schedule, but
the two countries are obviously having to strain
hard to find new areas of substantive agreement.
The principal documents signed by Giscard
and party chief Brezhnev were a brief formal
communique and a friendship declaration. The
declaration speaks of the need to deepen bilateral
consultations, but does not formally change the
1970 protocol on consultations. It stresses the im-
portance of summit meetings and agrees to hold
them on a "periodic basis," which may be a step
toward formalizing the annual summit conclaves.
The French endorsed the Soviet proposal to
convene a world disarmament conference,
probably because they regarded this as the least
painful way to appear responsive to Soviet
pressure on disarmament matters. The declara-
tion males no explicit mention of the European
force reduction talks, which the French have
refused to join.
The declaration refers in glowing terms to the
European security conference, with both sides
pledging to implement fully all the provisions of
Party chief Brezlrnev greets President Giscard in Moscow
its final act. Another phrase iowever, suggests
that the implementation will be achieved through
"bilateral agreements and understandings," an
apparent nod toward the Soviet view that the
agreements made in Helsinki concerning im-
proved East-West contacts are not automatically
self-implementing.
The French made some progress on
East-West contacts. The Soviets agreed to issue
multiple exit-entry visas for journalists along the
lines of the US-Soviet accord, and also
agreed-unenthusiastically according to the
French-to consider convening a working group
to discuss improved working conditions for jour-
nalists.
Bilateral agreements were signed on
cooperation in civil aviation, tourism, and energy.
Most of these had been negotiated beforehand
and were intended mainly to ensure some tangi-
ble r esults from the talks. Sizable trade
agreements were also signed, and Giscard said
that the possibility of increasing French oil im-
ports from the Soviet Union was discussed, but no
agreements were reached.
What would have been a routine visit at-
tracted considerable attention on the second day
when the Soviets abruptly po:.tponed for two days
Giscard's talks with Brezhnev and the related
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ministerial meetings. Some mystery still surrounds
this decision. The two leaders had differed over
the propriety of ideological detente the night
before, and it is possible Brezhnev decided a
show of diplomatic pique was appropriate.
It is also possible that Brezhnev's health was a
facto;. Over the past year Brezhnev's physical
stamina has waned. He can and does work quite
hard in spurts, ;u' he apparently can no longer
sustain a heavy schedule over a long period. In
the ten days before Giscard's visit, Brezhnev met
with Portuguese President Costa Gomes, par-
ticipated actively in the three-day visit to Moscow
of East German party chief Honecker, and con-
ferred with Syrian leade,? Asad. It is possible teat
he felt the need to slow his pace last week in view
of his busy schedule between now and the party
congress next February.
Nevertheless, newsmen who saw Brezhnev
on the closing day of the talks said he was looking
well. Despite the cold, he accompanied the
French President to the airport for his departure
and seemed animated and in good spirits.
By the end of . the visit, both Soviet and
French officials seemed anxious to put to rest the
rumors of serious substantive or health problems.
Brezhnev brushed off his absence, saying it was
due to a cold. The French Foreign Minister dis-
counted stories of a "blow-up" or "snub" and
accepted Brezhnev's explanation for the post-
ponement. The impression remained,
nevertheless, that the Giscard-Brezhnev
relationship has not yet achieved the amicability
that existed between Brezhnev and Pom-
pidou.
EUROPE COMMUNIST PARTY CONFERENCE
Delegations from 27 communist and
workers parties that met in East Berlin on Oc-
tober 9 and 10 apparently made some progress
toward holding a European conference of
communist parties. The Soviets evidently
decided that just getting the conference held
was more important than holding out for a
strongly worded and binding final conference
document. As a result, they apparently made
somr concessions. A number of problems must
stiff) be overcome before the formal conference
can be held, but the outlook for its convening
late this year or early next year has improved.
Although some sources say that the draft
of the conference document presented in East
Berlin was more acct ptable than its
predecessors, the East Germans were
nevertheless instructed to produce yet another
draft incorporating the comments and
criticisms made at the East Berlin meeting. A
sub-working group will meet in East Berlin
sometime next month to discuss the latest ver-
sion before referring it to an editorial commis-
Among the problems still to be resolved
are how to describe the relationship between
the communist and Western socialist parties,
and how to sell Moscow's interpretation of the
Helsinki summit document. Independent-
minded parties such as the Italians, Romanians,
and Yugoslavs still differ with the Soviets over
these points.
New Times, a Soviet foreign affairs weekly,
said the recent Berlin meeting was an "impor-
tant" step forward, but stopped short of
predicting that a European Communist con-
ference is a certainty. By conveying a positive
impression of the conference preparations, the
journal is showing how the separate parties in-
tend to exploit its outcome. If a bland noncon-
troversial final document is eventually signed
by the European Communist parties, each will
be able to cite those portions that accord best
with its own positions and to portray the con-
ference outcome as a victory for its own p0n-
ciples.
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ROMANIA: MERCHANT FLEET EXPANSION
The Romanians are expanding the'r
merchant fleet so it can carry a greater share of
their growing foreign trade. It now carries about
30 percent of the country's seaborne foreign
trade. Since 1971, the fleet has nearly doubled in
tonnage, adding about 500,000 dead-weight tons,
a major portion coming from Romania's own
shipyards.
Domestic yards have supplied nearly 200,000
deadweight tons to the fleet since 1971, nearly all
of which are general cargo ships and bulk carriers.
Domestically produced tonnage represents nearly
40 percent of all acquisitions and 75 percent of dry
cargo additions to the fleet since 1971.
Over one half of Romania's domestic ship
production goes to other countries. Fostered by a
guaranteed Soviet market for its surplus products,
these yards export dry cargo vessels to the Soviet
Union, bulk coal carriers to India, and semi-con-
tainer ships to Norway.
The current five-year plan began with a fleet
of 53 ships, totaling 595,000 deadweight tons. Ac-
quisitions during the first three years were
modest, totaling only 112,000 tons. The additions
of three Japanese-built tankers totaling nearly
260,000 tons and substantial other tonnage
brought acquisitions in 1974 to 373,000 tons. Total
additions for 1375 should go over 130,000 tons if
two bulk ore carriers are delivered.
At the end of 1970, general-purpose dry
cargo ships and tankers each accounted for about
one third of the fleet. The purchase of the
Japanese-built tankers brought the tanker inven-
tory to nearly 40 percent of the fleet by mid-1975.
Despite the acquisition of bulk carriers totaling
125,000 tons since 1971, their share of total fleet
tonnage dropped to 32 percent by mid-yei"r. The
fleet's portion of dry cargo tonnage ?Isc fell
slightly to 28 percent during this period.
The 1976-1980 plan calls for an ocean-going
fleet of nearly 200 ships totaling 3.2 million
deadweight tons, an increase of 1.8 million tons
over 1975. Tankers and bulk carriers will account
for much of the expanded tonnage. Planned
growth will allow Romanian ships to carry over 70
percent of its seaborne forei n trade by
1980. 25X1
NATO-GREECE: TALKS TO BEGIN
On the eve of negotiations to restore Greece
to full partnership in the alliance, the outlook is
for protracted talks with chances for success
heavily influenced by whatever progress is made
in the Cyprus negotiations.
Athens' decision last summer to withdraw
from the military side of NATO, made after
Turkey's invasion of Cyprus, has never been fully
implemented. Greece now occupies a position
within the alliance somewhere between its
original commitment and the French example of
total military withdrawal. This may prove difficult
to alter because a modified Greek commitment is
generally suited to the present requirements of
Greek policy.
Surrounded by unfriendly neighbors and
lacking adequate means for its own defense,
Athens retains an interest in maintaining ties to
the alliance. Yet the present arrangement of
limited membership is acceptable to the Greek
public, which continues to hold the alliance
responsible for failing to prevent the Turkish ac-
tion against Cyprus. In order to free attention and
resources for the Turkish problem, Greece has
sought to convene a Balkan Conference that
would encourage good relations with its com-
munist neighbors. To guard against diplomatic
and political isolation from its European allies,
Athens has pledged fealty to Europe and
vigorously pressed its application for EC
membership. These efforts to buttress Greek in-
dependence nevertheless do not adequately
satisfy Greece's security requirements.
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The negotiations with NATO will focus on
two related issues: the renewal of regional com-
mand ties with Turkey and the restoration of
Greek forces to NATO command.
Prospects for restoration of Turkish com-
munications and overflight rights on the southern
flank appear good. There are strong military
reasons for ending Turkey's strategic isolation,
and the allies are determined to bring pressure to
bear on Greece to satisfy NATO requirements as
well as Turkish needs. Athens has recently in-
dicated willingness to discuss these points.
Furthermore, Greek Prime Minister Caramanlis is
prepared to argue that such concessions do not
compromise a qualified Greek commitment to
NATO because this type of regional cooperation
satisfies Greece's own defense needs in the event
of an East-West conflict.
Restoring Greek forces to NATO command is
likely to prove more difficult. A substantial im-
provement in Greek-Turkish relations would be
necessary before this could take place.
Greece indicated recently that it is prepared
to soften earlier reservations r :garding the com-
mitment of its forces to NATO command, which
again suggests a new willingness to reconsider its
present position in the alliance. Evidence of a
Greek desire to retain substantial control over its
forces was also clear, however, in the failure of
the Greeks to clarify the precise terms of the new
Greek relationship.
Turkey has argued that unless and until
Greece agrees to submit its troops to the authority
of NATO's integrated command, Athens will not
have met the minimal political and military re-
quirements of an ally. The alliance itself is in
agreement on this point and is sensitive at the
moment to the need to emphasize allied political
unity. Accordingly, it will allow the negotiations
to go forward at a leisurely pace out of a prudent
respect for the political barriers to Greek-Turkish
cooperation. The allies will continue to
emphasize that financial assistance and the con-
tinued commitment of tactical nuclear weapons
to Greece's defense depend upon an unqualified
Greek commitment.
Progress on the Cyprus question is clearly
critical to progress in the NATO talks. Yet Prime
Minister Caramanlis' assurances that a satisfactory
settlement of this question will enable Greece to
resume full military participation in the alliance is
probably exaggerated. Other problems, such as
the dispute over Turkey's rights in the Aegean,
are likely to continue to aggravate Greek-Turkish
relations. Under these conditions, Greece is likely
to seek to retain for a while the benefits of securi-
ty at reduced cost. In the long run, however,
Greece needs the alliance, and a return to
something resembling the original Greek com-
mitment seems likely, provided there is progress
in the Cyprus negotiations and some negotiating
skill on the part of the allies.
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WEST GERMANY: L'AFFAIRE RALL
West German Defense Minister Georg Leber
is under attack as a result of allegations of covert
cooperation between West Germany and South
Africa in military and technical matters. Although
hard pressed by leftists in his own Social
Democratic Party who are demanding his resigna-
tion, Leber is relying on the backing of Chancellor
Helmut Schmic t and the reputation he has es-
tablished as an exceptionally able Defense
Minister.
Der Spiegel, a widely read and influential
newsmagazine, will print in its next edition a copy
of a letter in which the South African ambassador
in Bonn advised Pretoria that he and Leber had
discussed the possibility of a visit to south Africa
by West German General Rall. The Defense
Minister had denied any knowledge of the trip
when queried earlier by Schmidt and members of
the cabinet.
Earlier reports of the trip taken last year by
General Rall, until recently West Germany's
representative to NATO's military committee,
were based on documents stolen from the South
African embassy and leaked to the West German
press by exiled black South African dissidents.
While in South Africa, Rall visited a pilot uranium
enrichment plant, an action South African dis-
sidents claim as evidence that Bonn is helping
Pretoria produce nuclear weapons.
A senior Bonn official admitted privately last
week that the letter to be printed in Der Spiegel is
genuine. Nevertheless, Bonn still maintains that it
has not cooperated with Pretoria in the military or
nuclear development fields.
West German officials believe that the affair is
a deliberate attempt to smear Leber and the
Schmidt government. The slickness of the opera-
tion and some circumstantial evidence suggest
East German involvement.
The revelations have already soured West
Germany's relations with black Africa and
weakened Leber's political position in the cabinet
and in his own party.
it has also placed Chancellor Schmidt in a
delicate position. If he supports Leber, he will
further alienate left-wing Social Democrats who
have attacked the minister at every opportunity
and who may demand his resignation at the par-
ty's national congress in Mannheim next month.
The political costs of asking Leber to resign,
however, could damage Schmidt even more.
Leber is generally popular with the nation's
basicaily conservative electorate, and even the
opposition Christian Democrats hold him in high
regard. Schmidt's coalition partners-the Free
Democrats-would be deeply upset at Leber's
departure and might reconsider their alliance
succeeds in forcing Leber's resignation.
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EGYPT-US: SADAT VISIT
President Sadat will arrive in Washington next
week in search of both a symbolic and a tangible
affirmation of a friendship that is now more vital
than ever to Egypt and to his own position within
Egypt. Sadat's leadership of the Arab world is
hanging in the balance as a result of the second
Sinai disengagement agreement. Even his position
at home, although apparently secure at present, is
vulnerable over the longer term.
He will use his trip to demonstrate to Egyp-
tians and to other Arabs the symbolic importance
of his success in winning the gcod will of the US
after years of estrangement. To give substance to
the symbol, he will seek expressions of that
friendship in the form of economic and military
aid. He needs this aid to compensate for his grow-
ing isolation in the Arab world and, more impor-
tantly, to reassure his domestic constitu':nts that
his foreign policy has not bankrupted Egypt.
Sadat's chief purpose in signing the interim
accord with Israel last month was to obtain a
respite from preparations for war so he could
devote total attention to revitalizing Egypt's badly
neglected economy. He will Ioak to the US for
financial and technical assistance in overcoming
the many obstacles that confront this endeavor,
ranging from the immediate problems of an
enormous balance-of-payments deficit to the
longer range problems posed by bureaucratic in-
ertia and Egypt's inability to plan adequately for
economic development. Sadat will probably seek
a multi-year commitment for economic support,
US government assistance in attracting private US
investment in Egypt, and technical assistance in
orienting Egypt's socialist economy toward
greater liberalization.
Sadat will also ask the US for arms. The fact
that the US delivers arms to Israel does not in itself
bother Sadat; he recognizes this relationship as a
necessary ingredient in Washington's ability to
press Israel for diplomatic concessions. The fact,
on the other hand, that the US does not deliver
arms to Egypt as well does bother Sadat. To him, it
is a symbol of virtually the only thing still wrong in
the US-Egyptian-Israeli triangle: that the US still
puts Egypt in a second-class status and still regards
Israel's interests as more deserving of attention.
Sadat needs US arms, moreover, as a support
for his own domestic position. He has long been
subject to criticism from the Egyptian military es-
tablishment for so estranging the Soviets that
Egypt's source of arms and spare parts has been
endangered. The fact that he has successfully
used the concomitant improvement in relations
with the US to regain Egyptian territory-and has
at least begun the process of obtaining arms from
the West-has eased the criticism. Unless he ob-
tains US arms, however, he may come under
heavy criticism from the military for seeming to
condone US efforts to reinforce Israel's military
superiority while allowing Egypt to lapse still
deeper into a position of military in-
feriority.
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SPANISH SAHARA: MOROCCAN MARCH
King Hassan accelerated preparations this
week for a mass march into Spanish Sahara by
350,000 unarmed Moroccans; the first groups may
reach the border early next week. Despite
Hassan's protestations that the march will be
peaceful, clashes could occur with Spanish forces
or with armed elements of indigenous Saharan
political groups that want independence for the
region. Both Spain and Algeria are clearly unhap-
py over the King's latest gambit in his effort to
annex the disputed territory.
The first contingent left by bus, truck, and
train on October 21 from Ksar es Souk in the Atlas
Mountains for Tarfaya. Other contingents are to
be transported to Tarfaya from five additional
assembly points within Morocco. From Tarfaya,
they are supposed to proceed into the Spanish
Sahara toward El Aaiun, the capital. King Hassan
will be directing the march from a command post
in Marrakech and is seeking heavy international
press and TV coverage for the event.
More than 500,000 Moroccans reportedly
volunteered to participate; Moroccan authorities
are said to have selected only those physically fit
to endure the trek. Most of the volunteers seem
unconcerned about the hardships they will face,
accepting on blind faith that the monumental
logistic problems will be overcome.
By staging a civilian march, King Hassan
hopes to avoid a direct confrontation with
superior Spanish military forces. He has given
notice, however, that Morocco will fight in any
encounter with non-Spanish forces, presumably
meaning any Saharans and possibly Algerians who
might try to oppose the marchers.
Hassan apparently hopes to head off a debate
on the Spanish Sahara issue in the UN General
Assembly this year. Rabat's cause was seriously
weakened by the opinion issued last week by the
International Court of justice, which in effect en-
dorsed self-determination for the territory, and
the King probably fears that any General
Assembly debate would culminate in a new and
stronger resolution in favor of self-determination.
Morocco and Mauritania claim historic
sovereignty over Spanish Sahara and insist that
Madrid should turn the territory over to them on
the basis of the principle of territorial integrity.
The planned march is clearly intended to over-
come Spain's reluctance to settle the issue
through direct negotiations with Rabat and
Nouakchott.
Contacts between Madrid and Rabat this
week have made some Spanish officials optimistic
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that an agreement can be reached that would at
least reduce the tension surrounding the march.
Rabat has suspended rail service between the two
countries.
T e King., however,
restated in a speech on October 23 his intention
to proceed as planned.
Meanwhile, Spain petitioned the UN Security
Council to enjoin Morocco from staging the
march on grounds that it jeopardizes peace and
ignores the rights of the Saharans to self-deter-
mination. On October 22, the Counrl approved a
resolution requesting all parties to exercise
restraint and begin a dialogue. The resolution also
authorized Secretary General Waldheim to begin
Immediate consultations to resolve the dispute. It
avoided, however, any direct mention of Moroc-
co's planned mass march.
In El Aaiun, the Saharan General Assembly,
comprised of indigenous tribal and religious
leaders, has condemned the Moroccan march
and announced plans to resist the "invasion" of
their territory. The major Saharan political parties
in the territory-the Spanish-backed Saharan
National Union Party and the Algerian-backed
Polisario Front-have said they would stage a
countermarch north to the border. Both groups
probably have access to arms. Should either
become involved in clashes with the Moroccans,
the 12,000 to 15,000 Moroccan troops deployed in
southern Morocco might well intervene. Such an
intervention could escalate and involve Spanish
and Algerian forces in the area.
Algeria, surprised by Morocco's move, has
begun a diplomatic and propaganda campaign in
support of self-determination for Spanish Sahara.
On October 20, the Foreign Ministry summoned
Arab, Islamic, and African ambassadors in Algiers,
presumably to stress that the Saharans' right to
self-determination must be respected, in keeping
with the Court's opinion and a recent report by a
UN fact-finding group. The Algerian press has
labeled Morocco's policy as imperialism. On Oc-
tober 22, the --)vernment-controlled radio charg-
ed that A'- ., ans living in Morocco are being
prevented trom leaving the country and that
Algerian officials have indicated they would
prefer a transition period in which Spain would
have a considerable role. This would be followed
by a referendum offering a range of options from
independence to union with Morocco and
Mauritania.
Algeria is also taking defensive precautions
along its western border with Morocco. A gradual
reinforcement of troops has been going on for
several months, and Algeria reportedly has
recently acquired some tanks and other armor
from the USSR and Libya. Although Algiers will
probably not initiate hostilities with Morocco, its
reinforcement of the border area will exert
pressure on King Hassan and may tie down a large
number of Moroccan troops. The Algerians can
be expected to provide arms to the Polisario Front
and possibly some "volunteers."
J
Gouimime
an. tan A Ii
Spanish
T
Sa rara
Page 11 WEEKLY REVIEW Oct 24, 75
csrOccO
rrokech~ Kserfet'Stiuk
-lgedi OuarzeFnte
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Christian militiaman runs from sniper fire in Beirut
LEBANON: NO SOLUTION
Intermittent and sometimes heavy fighting
between Muslim and leftist elements and their
Christian adversaries continued in Beirut this
week as efforts to find a political solution
appeared to be making no progress. The
economic damage from the long crisis is moun-
ting.
Most of the fighting was in Beirut's southern
and eastern suburbs, with particularly intense
clashes taking place between the Sunni Muslims
of the Ras an-Nabeh region and the Christians of
Ashrafiyah. Over the weekend of October 18-19,
the fighting also briefly threatened to spread to
the Ras Beirut section in the western suburbs
where many Americans live. Except for a few
minor clashes, Tripoli, in northern Lebanon, and
Zah!ah, east of the capital, have remained quiet.
Kidnaping continued during the week with
both sides using mobile roadblocks as a means of
snatching members of opposing groups. On Oc-
tober 22, two USIA officials were taken from their
car by armed men at a roadblock in a largely lef-
tist-controlled southern suburb of the capital.
The Christian Phalanges Party opposes any
concessions to the country's Muslim majority. It
still insists that security be restored and the ques-
tion of "sovereignty"-a reference tr the Palesti-
nian presence-be settled before constitutional
reforms are considered. Early in the week,
PF;alangist leader Pierre Jumayyil threatened to
pull his organization out of the national dialogue
committee, charging that attacks on Christian
areas of Beirut are intended to force the
Christians to make concessions. Saeb Salam, a
former prime minister and a moderate Muslim
leader, warned that if reforms were not made
soon, "the whole system will be swept away."
Lebanon's parliament reconvened this week,
and the question of it- role in finding a solution to
the crisis will be intensively discussed over the
next few weeks. Interior Minister Shamun
believes the "recommendations" of the dialogue
committee must be endorsed by parliament as a
legally competent body. It is unlikely, however,
that the politically impotent parliament will have
any success in resolving the conflict.
On the economic front, the fighting is rapidly
causing Beirut to lose its status as the business
center of the Middle East. Some major firms, such
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ing, commerce, and tourism.
as McDonnell Douglas and Pechtel Corporation,
hs,ve already pulled out. Bank of America, First
National City Bank, and General Motors have also
evacuated employees and their families.
If hostilities ceased, most of the firms would
probably return because there is no readily
available alternative to Beirut as a regional
business center. Athens is too far away, Cairo is
over-taxed and over-bureaucratized, and Am-
man, Kuwait, and other Gulf cities that would like
to replace Beirut cannot match its com-
munications network, highly trained work force,
or housing and educational facilities.
If the fighting goes on, some companies are
likely to consider controlling their Middle East
operations from outside the region and eventual-
ly may bypass Beirut altogether.
The impact of such a shift would be disastrous
for Lebanon. Physical destruction and lost tourist
and trade earnings are already estimated at some
$3.5 billion-nearly a full year's gross national
product. A loss of earnings from financial services,
transit fees, and other commercial services would
turn Lebanon's usual trade surplus into a chronic
deficit. Two thirds of the country's gross national
product is drawn from its services, primarily bank-
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Israeli position on the Golan Heights
Page 14 WEEKLY REVIEW Oct 24, 75
SYRIA-ISRAEL: GOLAN TENSIONS
The Syrians, while continuing their
propaganda attacks on the Sinai accord, have
taken some military measures recently that may
be aimed at raising tensions on the Golan Heights
again. With the mandate of the UN observer
forces up for renewal at the end of next month,
Damascus probably hopes to create as much un-
certainty as possible about its real intentions until
then in hopes of prodding the US and Israel on
negotiations. So far, Israel's public reaction has
been low key, but Tel Aviv is clearly watching the
situation on the Heights closely.
Both th.: First and Third Syrian armored
divisions-the core of Syria's armored
strength-have been returning to their regular
positions near Damascus over the past few weeks.
They were sent to the northeast last spring at the
height of tensions with Iraq. In themselves, these
moves are not alarming. However, the Israelis
report that most Syrian units have canceled
leaves, and other sources claim that Damascus has
ordered a large call-up of reservists.
Late last week, about two brigades of Syrian
troops, possibly unconnected with the movement
of the armored units, were also spotted strung out
on the road from Homs, north of Damascus, to a
point 25 miles south of the capital.
Meanwhile; there were reports in Damascus
last weekend that the Syrians are planning a
limited military operation of short duration to
seize some Israeli-held territory along the dis-
engagement line. Such a plan cannot be entirely
discounted. The Syrians could calculate that the
US would restrain the Israelis in order to keep the
fighting from spreading and jeopardizing the
Sinai accord.
On the other hand, the "plan" may have
been only a story deliberately leaked by the
Syrians to increase tensions over the next few
weeks. The Syrians could hold exercises near the
front and call up some reservists, making it almost
impossible to tell a real operation from a bluff.
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The objective would be to force the US to step in
quickly to defuse the situation and refocus its ef-
forts on obtaining a Syrian-Israeli accord.
In a recent interview with a Kuwaiti
newspaper, Syrian President Asad casually dis-
missed the importance of the UN mandate,
stating that Syria would extend the mandate if it
were in its interests to do so, but that the presence
of the UN observer forces would not make any
difference if Syria decided to go to war. Asad's
remarks and those of other Syrian officials suggest
that no official public decision on the mandate
should be expected before late November.
The Israelis, for (heir part, may have in-
structed their forces on the Golan to adopt a
more aggressive posture to signal Damascus that
Tel Aviv is full alert to the possibility of renewed
fighting.
Both the Israelis and the Syrians, in fact, have
recently committed an increasing number of
minor violations in the UN buffer zone. Last
week, two Syrian shepherds were killed by the
Israelis in a disputed part of the zone, and this
week the Syrians claim to have clashed with an
Israeli patrol. Such violations and provocations
are certain to keep both sides on edge and could
ANGOLA: DIM PROSPECTS
With less than three weeks to go before the
scheduled date for independence-November
11-the chances of a political settlement being
arranged among Angola's warring liberatfion
groups still appear dim. Portugal may withdraw
from the territory without formally transferring
sovereignty to anyone.
After almost two weeks of new fighting, the
Zairian-backed National Front for the Liberation
of Angola has made some progress in northern
Angola. Front forces are now within 13 miles of
Luanda, the capital, which has been controlled
since June by the Soviet-backed Popular Move-
ment for the Liberation of Angola. Front troops
apparently have met less resistance than they had
expected.
Unless the Popular Movement's resistance
stiffens, the Front could be emboldened to try
fighting its way back into Luanda. Since being
driven from the city, the Front has based its
strategy on the premise that its forces could not
militarily re-enter the capital, but that they could
maintain a siege of the city that would be suf-
ficient to pressure the Movement into agreeing to
a coalition government.
In central Angola, forces of the Popular
Movement and of the National Union for the
Total Independence of Angola have fought to a
standstill. The Popular Movement wants to cap-25X1
ture Nova Lisboa, the headquarters of the
National Union, and the National Union wants to
recapture the port of Lobito, which has been held
by the Popular Movement since August.
The reconciliation committee recently sent to
Angola by the Organization of African Unity
returned to Kampala on October 21 after conferr-
ing with the three liberation groups. The com-
mittee reportedly will recommend that the OAU
make one last attempt to convene the leaders of
the three groups at a summit meeting in Kampala.25X1
Some members of the committee are skeptical,25X1
however, that a reconciliation can be brought
about.
Lisbon is still trying to put together some sort
of coalition to take over on November 11. Earlier
this week, a high-ranking Portuguese cabinet
minister arrived in Angola to talk with liberation
group representatives. Barring a take-over of the
government in Lisbon between now and in-
dependence by radicals who would recognize the
Popular Movement, Lisbon may unilaterally
transfer sovereignty to all three groups in the
name of the "Angolan people," leaving the final
solution to a military struggle among the libera-
tion groups.
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TAN ZAM RAILROAD OPENS
Ceremonies marking the official opening of
the Chinese-built Tan Zam railroad are being held
on October 24, Zambia's National Day.
Construction of the 1,150-mile line began in 1970
and was financed by a $402-million credit. An es-
timated 16,000 Chinese personnel were present in
Tanzania and Zambia at the height of construc-
tion. Western experts assess the railroad as high
quality in design and execution aimed at low-cost
maintenance.
Although the rail line is not scheduled for
normal commercial operation until early next
year, Zambian copper began moving over it to the
Tanzanian port of Dar es Salaam last month. Zam-
bia's move came after large-scale fighting among
nationalist groups in Angola caused the suspen-
sion of service on the Benguela rail line, which
carried half of Zambia's international traffic. Port
congestion at Dar es Salaam will limit the diver-
sion of large amounts of traffic over the Tan Zam
railroad, but the availability of interim service on
the line points up the potential importance of the
M'~
ZAMBIA
LUSAKA1
RR.
MNCANfSf
ISENYA
proj pct as an alternative to Zambia's existing
transport arrangement.
The railroad is scheduled to reach an annual
capacity of 1 million tons each way sometime next
year. At that time, it will accommodate two thirds
of Tanzania's total transport requirements and
half of Zambia's, including 75 percent of its
copper exports. By 1978, the railroad will be at full
capacity of 7 million tons and should be able to
handle all overseas traffic for both Zambia and
Tanzania, provided port facilities at Dares Salaam
are adequately expanded. About 300 Chinese
personnel are expected to remain through 1978 to
provide technical services. Repayments on the
30-year loan, to be made equally by Tanzania and
Zambia, will come from income from rail
operations and will not impose any hardship. An
operating surplus of $27 million annually is pro-
jected by 1983, when repayments totaling $14
million annually are scheduled to begin.
Other economic and social benefits are like-
ly. For Tanzania, it will stimulate agricultural
development in the western region and provide
access to exuloitable coat and iron ore reserves in
the southern highlands. To facilitate this develop-
ment, China recently extended a $75-million loan
for exploitation of iron ore deposits at Chunya
and coal deposits at Tukuyu. A feeder line from
the deposit sites to the main line, also to be
financed under the Chinese credit, will allow
these deposits to be marketed economically.
The Tan Zam railroad will provide landlocked
Zambia with a major alternate foreign trade
transport option and will increase access to
northern Zambia, where there is some opportuoi-
ty to expand cattle raising, dairy farming, and
crops of coffee, tea, corn, and rice. China recently
extended a $50-million credit to Zambia for rural
development projects. Zambia also may now be
able to exploit manganese and copper ore
deposits near Mkushi, which have not been
developed because essential transportation
facilities were lacking.
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TANZANIA
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CANADA: TRUDEAU CHALLENGED
The Canadian postal and sorters union har
quickly challenged the Trudeau government's
new economic program by shutting down post
offices in virtually all major cities. The union is
demanding salary increases far in excess of those
allowed under the control program. The postal
workers' action is aimed directly at the main goals
of the control plan which are to check excessive
wage increases and to refurbish Prime Minister
Trudeau's image as a "take-charge" leader.
The union, demanding a 51-percent increase
over a 12-month period, rejected the recommen-
dations of an official arbitrator for a 38-percent
wage increase over a 30-month period. The
government was willing to grant the 38-percent
raise even though it exceeded the control
program's guidelines. A provision in the new
program grants exceptions for such raises to
workers whose jobs are closely related to those of
another group which recently has gained a more
favc,rable settlement. Canada's other major postal
union, the letter carriers, received a 38-percent
wage hike in April.
The large wage settlements this year have
been a major factor contributing to Canada's in-
flation, which is running at a rate higher than that
of most major industrial countries. The com-
petitiveness of Canadian goods on world markets
has been affected, and the nation's trade deficit
has grown rapidly.
Canadian labor eaders were quick to
recognize that Trudeau's economic program was
aimed chiefly at controlling wages. In addition to
the postal workers, several other unions have
threatened to ignore wage controls or to
challenge their constitutionality in the courts. The
Trudeau administration had hoped the first case
to come before its new Anti-Inflation Review
Board would deal with a rollback of prices in
order to convince labor of Ottawa's good faith.
The postal strike . appears to have t-pset this
strategy.
Trudeau has staked his political future on a
bold program of economic controls to check in-
flation and cannot afford to back down. Members
of his own Liberal Party have threatened to call for
a special leadership convention at a party con-
ference next month-a move some observers felt
might have the support of 20 to 25 percent of the
conference delegates. Trudeau hoped to avoid
this blow to his prestige as party leader by an-
nouncing the new economic program.
The postal workers may eventually com-
promise on a wage settlement along the lines of
the government offer. In the meantime, however,
Trudeau's political skills will be severely tested as
he seeks the necessary nationwide support for his
program and his own leadership. A portent of
trouble ahead was the defeat last week of
Trudeau's hand-picked candidate, Com-
munications Minister Juneau, who lost a by-elec-
tion in a working class Montreal constituency that
had been held by Trudeau's Liberal Party for over
50 years.
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SELA CREATED
The Latin American Economic System, a new
scheme for economic integration among Latin
and Caribbean governments, was established at a
ministerial meeting in Panama on October 17. The
process that led finally to its formal creation
ge.,erated heightened sensitivity among the
governments to each other's political needs as
well as some new formulas for regional coopera-
tion.
Headquarters of SELA will be Caracas, its
secretary general is a former finance minister of
Ecuador, and its starting administrative budget of
$400,000 will derive from a carefully contrived
dues-paying system based on ability to pay. SELA
was shaped as a fairly loose federation with
modest long-range goals, minimal structure, and
some concrete plans for joint enterprise.
The emergence of SELA as a forum for prac-
tical business and technical exchange among
members is largely she result of the resistance by a
bloc of nations to the visionary and ideologically
inclined motivations of its original promoters. The
notion of SELA was first advanced over a year ago
by Mexican President Echeverria, more as a
rhetorical fiourish than a considered idea.
Venezuela's President Carlos Andres Perez, a
proponent of Latin unity, actively supported the
concept. The highly nationalistic governments
were attracted to the proposed organization by its
exclusion of the US but inclusion of Cuba, and by
the expectation of financial support from wealthy
Venezuela. Brazil and several other countries
feigned interest for the sake of Latin unity but
were exceedingly reluctant to let themselves be
trapped in yet another controversial Third-World
association whose principal function might be to
rail against the US.
Rather than rolling with the political tide that
had often swept them into unanimous positions
and resolutions with which they felt uncomfor-
table, the governments of Brazil, Uruguay, Argen-
tina and others industriously participated in the
negotiations preparatory to SELA's founding.
They insisted on rules to prevent SELA's decisions
from becoming obligatory, they demanded
specific goals for the organization, and they
offered various drd~ts of charter language and
development proposals. The candid exchange of
views created an atmosphere of cooperation and
positive thinking, so that the large majority of the
members have come to view SELA as a
business-like association for formulating regional
strategy, setting up multinational corporations,
funding regional transportation and communica-
tion systems, and other practical ventures.
The experience is likely to attract the interest
of the less assertive governments in playing a
more active role in regional affairs. For the lighter
weight pretenders to regional leadership, the ex-
perience may prompt some sober thoughts about
the wisdom of introducing confrontational issues
into regional bodies in view of the sharp political
differences produced by the Echeverria-Lopez in-
itiative and the unlooked for concern expressed
by some countries over the appearance of in-
stitutionalized antagonism toward the
US.
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BOLIVIA-CHILE-PERU
Despite the lofty rhetoric emanating from the
meeting in Lima last week of the military leaders
of Bolivia, Chile, and Peru, the noncommittal
joint communique clearly indicates lack of agree-
ment on two basic issues involving the three An-
dean nations: regional arms limitation and Boli-
vian access to the sea.
Related talks were held in La Paz last August
and in Santiago in early September; a follow-up
meeting on arms limitation is scheduled for San-
tiago next January. Beyond expressing support for
the arms talks and committing themselves to "a
method of consultation regarding military
matters," the participants added little to the
oft-expressed desire to ease tensions in the area.
Limiting "Offensive" We_~~ons
Regarding the possibility of a regional agree-
ment to limit "offensive" weapons and future
arms acquisitions, the three countries apparently
have been unable to agree even on the basis for
measuring the relevant factors. in the draft
recommendations, there are proposals to prohibit
highly sophisticated armaments, including
weapons of biological and chemical warfare,
nuclear weapons, attack carriers, ballistic missile
systems, and long-range heavy bombers-all
items out of reach of these nations in any case.
When they discussed specifics, however, Chile
and Peru reportedly had major differences on
what types of artillery, tanks, or missiles should be
subject to limitation.
Peru clearly is hesitant to tie its hands regar-
ding future military purchases, including those
from the USSR, while Chile wants to retain the
right to build up its forces to at least parity with
Peru. the Chileans are
rapidly upgrading their military defenses in the
northern border region by constructing tank
traps, lengthening runways, and building military
barracks. These preparations have been under-
taken despite an international arms boycott, a
lack of financial resources, and an apparent
lowering of tensions between the two countries.
Bolivia, which reportedly came to the con-
ference with one purpose in mind-to gain com-
mitments from the other two countries for con-
crete discussions concerning its lack of sovereign
access to the sea-had to settle for the now--
familiar Peruvian refrain supporting Bolivia's
desire in principle and "in accordance with inter-
national law."
The evident lack of enthusiasm by Lima and
Santiago for resolution of Bolivia's landlocked
status supports earlier indications that neither
side seriously contemplates ceding any territory
;o Bolivia at this time. Although there are in-
dications that Lima might consider a plan creating
some form of international zone in Chile through
territory Peru lost in the War of the Pacific nearly
a century ago, even that may be little more than a
tactical maneuver to delay further substantive
negotiations and put Chile on the diplomatic
defensive.
On the other side of the border, a reported
Chilean proposal-apparently not yet conveyed
to La Paz-offering a strip of land on its side of the
Peru-Chile border to Bolivia if matched by an
identical Peruvian cession, also seems designed to
put Bolivia off without providing a realistic basis
for settlement. It is highly unlikely that any Peru-
vian leader could even consider relinquishing
sovereignty over territory now under Peruvian
control. Indeed, it seems unlikely that Peru's
military leaders woLld agree to Chile's cession of
any former Peruvian territory to Bolivia. Lima was
granted this veto power under the terms of its
1929 treaty with Santiago. 25X1
Chile has been studying a Bolivian proposal
submitted in late August that it cede an 8-mile
corridor along the Chilean side of the border with
Peru, and La Paz has announced that a response is
expected by mid-November. There is some
resentment in Chile over Bolivian President
Banzer's agitation for a quick settlement.
Nevertheless, the Bolivian proposal is being dis-
cussed at a high level in the Chilean government,
and the US embassy reports that navy leaders are
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already voicing strong opposition to any change
in sovereignty.
Santiago probably has not yet formulated any
firm counterproposal, but it may be considering
some kind of long-term lease or the establish-
ment of an international enclave. There might be
strong military opposition to this idea, however,
particularly if tripartite control appeared to give
Peru a foothold in territory that it lost to Chile in
the war.
President Banzer has stated squarely that his
country wants full control over a land connection
to the Pacific-a position that leaves little flexibili-
ty for negotiation. The Bolivians may hope that
Chile's current international difficulties and signs
of hemispheric solidarity for their cause will force
President Pinochet to concede territory. These
hopes probably are not well founded, for Chile
has been careful so far not to commit itself to
much more than agreement to study Bolivian
aspirations.
Continued tripartite discussions on the Boli-
vian problem and the issues underlying the Lima
meeting are certain. While all three parties
genuinely desire to maintain stability in the
area-for various and not always complementary
reasons-the basic patterns of mistrust,
nationalism, and perhaps conflicting military
goals seem likely to block any substantive agree-
ment on important regional problems in the near
future.
CHILE: SECURITY CRACKDOWN
Wide-ranging actions by Chilean security
forces in recent weeks suggest that the govern-
ment is making a determined and apparently
successful effort to destroy vestiges of un-
derground extremist organizations.
The Movement of the Revolutionary Left
(MIR), which supported Salvador Allende's
Popular Unity government, was dealt a severe
blow when its second-in-command, Dagoberto
Perez Vargas, was killed by police in a shootout
near Santiago on October 15. Five other members
were captured, and four who escaped are being
tracked by police. One of the escapees is
reportedly believed by officials to be Andres
Pascal Allende, the former president's nephew,
who became leader of the MIR when its former
chief was shot down by security forces a year ago.
His capture or death would be a major setback for
the group.
Large quantities of weapons, many of which
had been hidden prior to the military take-over
were discovered during the past month
cases were probably intended for the more
violence-prone MIR or left-wing Socialists. The
discovery of six caches of medical supplies and
plastic surgery equipment for a clinic suggests
that efforts were under way to build up the un-
derground organization and possibly prepare for
an eventual struggle against the regime. 25X1
The government has also arrested several
dozen leftists on grounds of printing and dis-
tributing pamphlets, presumably of an an-
ti-government nature. 25X1
Terrorist action by the MIR has become in-
creasingly rare as a result of the vigilant
countermeasures by the military government. In a
recent communique published in Argentina, the
MIR warned that it was prepared to begin "a vast
reprisal" against firms and governments that in-
vest in Chile. There have been no indications,
however, that the group is able to mount a
terrorist offensive of any magnitude. At most, it is
capable of isolated acts of violence, and chances
of this may be reduced as government raids drive
it further on the defensive.
Recent successes will reinforce the deter-
mination of the Pinochet government to maintain
strict security measures. The government has
frequently justified its hard-line tactics as the ma-
jor factor in reducing leftist-inspired violence,
,end it now can point to evidence that a subversive
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ARGENTINA: PERON'S ReTURN
President Peron's resumption of her duties
last week failed to bring on the open political
crisis that many had feared. Instead, her non-con-
troversial address to a Peronist rally may have
smoothed fears in military and business circles
and renewed her government's lease for a time.
Opposition is still strong, however, and unless she
is now prepared to accept a purely ceremonial
role, she could at any time provoke serious
problems.
Initially, at least, she appears to have sub-
mitted to a degree of advice and direction from
the generals and politicians trying to keep Argen-
tina on an even keel. She adhered closely to a
prepared text, obviously approved in advance by
Peronist and military leaders. It touched on three
popular themes-evoking the memory of her
husband, denouncing terrorism, and promising
support for the military's fight against subversion.
In addition, she repeated an earlier promise to
resume the dialogue with all political groups that
was begun by Juan Peron. Despite increasing
pressure for further wage hikes, and the popular
acclaim she could have reaped by promising
them, Peron said there would be none.
The crowd received the President's remarks
with relatively little enthusiasm. Those loyal to
Peron worked hard to fill the Plaza de Mayo, but
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the turnout of 50,000 to 70,000 was not impressive
compared to previous rallies.
The surface calm may be only temporary. The
return of the widely discredited President un-
doubtedly will exacerbate tensions, especially
within the factionalized Peronist movement.
Indeed, Peron reportedly has already indicated
her desire to name to the cabinet two minor aides
whose elevation would generate serious con-
troversy because of their ties to former strong
man Lopez Rega. In the meantime, Interior
Minister Robledo, who is well regarded by the
military, has promised the officers that he will
coordinate government activities and ride herd
on the unpredictable President. If he can do this
withou being perceived as a man who seeks to
aggrandize himself, the administration stands a
chance of limping along for some
HONDURAS - EL SALVADOR
Treaty Unlikely
Honduras' recent initiative in seeking a treaty
with El Salvador seems destined to founder, and
last week's military moves, alerts, denials, and in-
creased fears are likely to be a way of life along
the border for some time to come.
Salvadoran President Molina and Foreign
Minister Borgonovo in conversations with the US
ambassador were notably unenthusiastic about
the draft Honduras presented to the OAS on Oc-
tober 2 in another effort to normalize relations
disrupted since the 1969 soccer war. The
Salvadoran officials were probably piqued
because Honduras gave them no advance notice.
They also prefer informal bilateral contacts rather
than formal organizational approaches that might
raise the threat of binding arbitration. Indeed,
President Molina felt that Honduras' action
violated an informal understanding he had reach-
ed with Honduran Chief of State Melgar last July
to pursue the bilateral path.
The Honduran draft reportedly proposes
simultaneous resolution of the border demarca-
tion problem and re-establishment of diplomatic
and commercial relations. El Salvador has held
that the complicated border problem should be
approached only after restoration of relations.
Honduras does not want to separate the two, feel-
ing that it can exploit El Salvador's desire to boost
trade by opening highways to gain agreement to a
definitive demarcation. Honduras is five times the
size of El Salvador, but feels threatened by its far
more populous neighbor because of the border
problem.
Melgar and Molina to Huddle
Melgar and Molina are likely to discuss the
issue at the Central American presidents' meeting
scheduled for October 31 in Guatemala. There is
unlikely to be any shift in the Salvadoran stance,
however. La Prensa Grafica, Salvador's leading
daily, stated on October 8 that if Honduras truly
desires peace, it will separate the border question
from its other proposals, more than likely an ac-
curate presentation of the government's view.
An additional complication for El Salvador
will be the legislative elections next March. The
Molina government already faces problems and
will try to avoid having the touchy treaty issue in-
troduced into the campaign. Once through those
elections, the country will be heading into a
presidential campaign in 1977. Near-term
progress is therefore unlikely.
Last week, reports of Salvadoran troop
movements quickly prompted a Honduras
"defensive" mobilization in the border area. The.
Salvadoran Ministry of Defense denied the
reports and- despite a story in the sensationalist
Honduran press-there were no clashes. Both
sides, however, remain acutely sensitive to real or
imagined movements near the frontier and this
type of development boosts already exaggerated
fears in the area. Given the bleak diplomatic out-
look and the lack of regular communication
between the military commands, a continued
simmering border problem and occasional in-
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BRAZIL: OIL DECISION UNPOPULAR
President Geisel's decision to allow foreign
firms to prospect for oil in Brazil appears to be
hurting the administration politically despite its
Efforts to dramatize the need for such a move.
The new policy runs counter to nationalist senti-
ment, adds to the public impression that things
are going badly for the country, and provides the
opposition political party with a ready-made issue
to exploit.
Geisel has experienced several significant set-
backs since entering office last year amid specula-
tion that he would greatly open up the closed
political system. Conservatives have prevented
him from carrying his political liberalization as far
as he wanted, although some progress has been
made. Impressive gains for the opposition party in
last year's remarkably free congressional elections
undercut the government's prestige and evoked
strong criticism from military conservatives who
opposed holding the elections.
`conomic problems, moreover, have been a
constant headache and have tarnished the luster
of Brazil's "economic miracle," during which the
nation experienced several consecutive years of
remarkably high growth rates. Thus, despite the
strong backing he had on assuming office,
Geisel's freedom of action has grown steadily
more restricted.
The US embassy reports that the ad-
ministration's handling of the decision. despite a
media campaign designed to point out the need
for relatively drastic action, was awkward. The
leadership of the government party reportedly
was not consulted and only informed of the deci-
sion just before it was made public. The result was
to undermine further the party's sagging prestige.
The opposition, on the other hand, now has
additional ammunition with which to attack the
administration. It can point to authoritarianism in
the failure to consult on the matter with the duly
elected congress and can charge Geisel with
reversing a 20-year-old refusal to allow foreigners
to exploit Brazilian oil. Indeed, the party already
has charged that the government had "other
reasons, not stated" for its move. Moreover, the
party has been strengthening its nationalist
credentials for some time with its conduct of a
parliamentary inquiry into the role of multi
national business in Brazil.
Military conservatives are reportedly dis-
pleased by the manner in which the President
handled the recent decision. They are said to be
fearful that opposition politicians and outright
subversives will join forces to exploit the con-
siderable sentiment aroused by the issue. Their
concern could lead to increased pressure on
Geisel to return to severe restrictions on all
political activity.
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THE KOREAN QUESTION AT THE UN
The Korean question is one of the most
strongly contested issues to come before the UN
General Assembly this year.
In the debate now under way iii the Political
Committee, the. main topics are the status of US
forces in Korea, how to terminate the UN com-
mand-established over 25 years ago-and how
to arrange a mechanism for preserving the ar-
mistice.
The General Assembly cannot take decisive
action to resolve these issues-US tortes are in
Korea under a bilateral agreement, and only the
Security Council can end the UN command-but
the debate could have an impact on stability in
the Korean Peninsula.
North Korea and its supporters insist that
when the command is terminated, US forces must
L.ithdraw and North Korea and the US should
negotiate a bilateral peace treaty to replace the
armistice. South Korea and its supporters oppose
withdrawal of US troops and propose that all par-
ties concerned-including Seoul-agree on
measures to maintain the armistice machinery
after the UN command ends.
The Implications
Adoption of the pro - North Korean resolu-
tion would be used by Pyongyang to challenge
the legitimacy of the US presence in Korea, of the
UN Command and, by extension, of the armistice
agreement, because the UN Command was the
only allied signatory. It mighi encourage
Pyongyang to assert a claim to the islands off the
west coast of Korea, which the armistice agree-
ment placed under UN control.
Passage of the pro-Seoul resolution would
put the General Assembly on record in favor of
continuing the armistice agreement. This would
offset Pyongyang's recent diplomatic successes
and reinforce international support for existing
security arrangements in Korea. Still, the basic
problem would not be solved, and the North
Koreans could try again next year to push their
resolution through.
The Political Committee's vote on the two
draft resolutions will probably come next week
and will be close. The pro-Seoul draft has a
better-than-even chance, especially if, as an-
ticipated, it gets voted on first. Japan, the UK,
Canada, and France-in addition to the US-are
actively lobbying for the South Koreans. Seoul
will obtain sizable blocs of votes from Western
Europe and Latin America, and it has worked
diligently to retain the support of its friends in
Asia, Africa, and the Middle East.
The pro-Pyongyang resolution will almost
certainly also come up for a vote, and it too may
pass, also by a narrow margin. North Korea's im-
proved prospects result in large part from its
success in adding nonaligned countries to its
traditional communist supporters, as well as from
new communist regimes that have come to power
in Southeast Asia. Peking continues to help with
strong rhetoric in New York and with lobbying in
selected capitals. Moscow's support is now largely
pro forma.
If the Political Committee passes both drafts,
pressure almost certainly would develop for some
kind of compromise in the General Assembly.
A group of Asian counts ies-Malaysia, In-
donesia, Singapore, Thailand, and the Philip-
pines-is considering a formula that includes
provisions from both draft resolutions, and it
might gather momentum. The Japanese, and even
the South Koreans, have indicated that such a
compromise might prove "useful" at some point.
Still, given the sharp differences that exist
between the two sides, the assembly session may
end with conflicting resolutions and without
clear-cut recommendations on
Korea. 25X1
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AUSTRALIA: POLITICAL CRISIS
The Liberal-Country opposition's decision to
vote down all government appropriation bills in
the Senate has caused a severe political crisis in
Australia. Considering the stubbornness of the
two protagonists, Prime Minister Whitlam and
Liberal Party leader Fraser, maneuvering will
probably continue for several weeks before a test
at the polls.
After weeks of indecision, Fraser announced
last week that the opposition-controlled Senate
would not pass the Labor government's annual
money bills until Whitlam agreed to a general
election. Fraser's co'ileagues, who advocated an
early challenge to the government, seized upon
the dismissal of a cabinet minister for corruption
to convince Fraser that Labor would never be
The ensuing charges and countercharges
over the opposition's move have brought tempers
to a level unusual even in the context of
Australia's normally turbulent politics. The
government argues unconvincingly that the
Senate does not have the constitutional authority
to block appropriations, and the opposition's
claim that the government is now obliged to call
national elections is also open to question. The
only clear result of the opposition's challenge is a
closing of ranks in the formerly deeply divided
Labor Party. Trade unions have threatened a
general strike to demonstrate their support for
the government. Despite these shows of unity,
the government still trails the opposition by some
distance in public standing.
With rare smiles Prime Minister Whitlam and Malcom Fraser (r) meet
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Whitlam wants to avoid full national elections
that his party would almost certainly lose. Even
though many Australians see the unprecedented
blocking of appropriations as dirty politics, they
blame Labor for the country's economic ills.
Whitlam is threatening to call elections for
one half of the Senate, which normally would be
held by next summer. He sees a chance to tilt the
power balance in the Senate by winning some of
these seats. Indications are, however, that a half
Senate election would only strengthen the op-
position's position in the upper house.
Whitlam's only other hope is that the doubts
of some Liberal senators over the possible serious
consequences or the cutting of government ap-
propriations may cause a break in opposition
ranks in a Senate vote. This likelihood seems to
have been reduced, however, by the Governor
General's threat to intervene in the im-
passe-which the Liberals see directed more at
Whitlam than at them-and by a strong statement
of support for Fraser by a respected former
Liberal prime minister.
Whitlam seems likely to call elections at least
for half the Senate by early December. With
further erosion of the government's position in
the upper house the probable outcome, Labor
may have to face the full parliamentary elections
LAOS
The Communists Celebrate
Celebrations marking the 30th anniversary of
the Lao independence movement have
emphasized the totality of the communist grip on
Laos.
A massive rally was held in Vientiane on Oc-
tober 12, but the real focus of activities was at the
Pathet Lao headquarters near Sam Neua, deep in
the mountains of the northeast. During several
days of festivities, leaders of the communist party,
which goes by the name of the Lao People's
Revolutionary Party, dropped all pretenses that
they are merely nationalists fighting colonialism
and imperialism. They proclaimed instead that
their goal is to transform Laos into a "Marx-
ist-Leninist society."
Although Kaysone Phomvihane was not ex-
plicitly identified as the top man in the party, the
fact that he delivered the 'engthy keynote address
in Sam Neua is a clear indication that he occupies
that position. Souphanouvong, who is still the
titular leader of the Lao left, gave only a short and
unremarkable speech.
In his talk, Kaysone said that the communists
were willing to maintain diplomatic relations with
Washington, if the US respects the sovereignty
and independence of Laos, ceases support of the
Lao rightists, and agrees "to help heal the wounds
of war," a catch phrase for new aid. The inclusion
of the aid provision gives the communists a
pretext for breaking relations or for further
harassment of the embassy in Vientiane at any
time.
25X1 25X1
The anniversary celebrations also served to
demonstrate once again that Prime Minister
Souvanna Phouma does not have a meaningful
role in the government. The communists hustled
Souvanna, who was a founding member of the
Lao independence movement in 1945, to Luang
Prabang to prevent him from participating in the
mass celebration in Vientiane. His only part in the
festival was a short radio address read by the an-
nouncer that reviewed in a disjointed fashion the
"30-year liberation struggle."
Pathet Lao leaders will probably make certain
that Souvanna spends most of his time in Luang
Prabang until after the elections scheduled for
next April, when he will formally retire.
Preparations for these elections, which will ratify
coalition, are well under way.
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I
CHIN-l'S COMPUTER INDUSTRY
China's computer industry has progressed
significantly during the past several years. At least
two types of digital computers have been produc-
ed with speeds of approximately one million
operations per second. Several kinds of minicom-
puters have been developed, and an announce-
ment was recently made that China had produced
its first hybrid computer.
Fourteen plants and research institutes are
known to produce computers in China. Peking
Wire Communication Plant Number 738, the
largest producer, began manufacturing vacuum
tube computers in 1958 and transistor computers
in 1965. The plant currently is manufacturing
small, medium, and large-sized integrated circuit
computers.
Shanghai Radio Plant Number 13 probably
produces about 50 computers annually, including
30 to 35 general purpose digital computers. The
production of a small number of analog com-
puters is divided between Peking Radio Plant
Number 1, the Shanghai Electric Relay Plant, and
the Tientsin Instruments Plant. ThF--e plants have
produced general purpose analog computers for
scientific and engineering applications Although
little information has been available since the
Cultural Revolution, analog and hybrid com-
puters are probably widely used, particularly in
defense-related establishments. The recently an-
nounced HMJ-200 hybrid computer system,
designed by the Peking plant, could be used in
the simulation of dynamic systems for military and
space applications.
Workshops at design institutes also make a
contribution to computer production in China.
Third generation computers, for example, have
been developed at a number of institutions
located in Peking and Shanghai.
Production is still too small for assembly-line
techniques. The plants assemble computers by
hand in batches of three to six. Production in 1975
is not likely to exceed 150 units. Of these, the vast
majority will be digital types. Including imports,
China probably has fewer than 1,500 computers in
operation, compared with more than 100,000 in
the US.
For priority civilian and military programs
requiring the use of large-sized computers, China
has built at least two models since 1973 that are
comparable to the largest US machines that were
commercially available in 1963. Within the next
three to four years, the Chinese will probably be
able to assemble on a one-of-a-kind basis a com-
puter with nearly twice the present one miliion-
operation-per-second capability.
During this period, domestically developed
large-sized computers will probably not be ade-
quate to satisfy all priority needs in such fields as
weather prediction, control of large industrial
complexes, seismic data processing, and military
applications. The Chinese have recently purchas-
ed a large-sized IRIS-60 computer from France
and considered purchasing a US Burroughs
model 7700, the export of which was subsequent-
ly denied by the Department of Commerce.
A wider variety of digital computers using in-
tegrated circuits will probably be announced by
the Chinese during the next three to four years.
Development of minicomputers and large-sized
computers with expanded capacities probably
will be emphasized. Minicomputers for
applications such as industrial control, testing and
small-scale engineering problem solving un-
doubtedly represent the classes most needed by
the Chinese. Improvement in computer design
will be achieved by developing better system
architecture and using more advanced integrated
circuit technology. However, the Chinese are
likely to be handicapped in trying to increase per-
formance in large-sized models by an inability to
fabricate core memories with sufficiently high
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