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April 4, 1975
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Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Secret Weekly Summary Secret No. 0014/75 April 4, 1975 Copy N9 66 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 The WEEKLY SUMMARY, Issued every Friday morning by the Office of Current Intelligence, reports and analyzes significant developments of the week through noon on Thur3day. It fre- quently Includes material coordinated with or proparee by the Office of Economic Research, the Offico of Strategic Research, the Office of Geographic and Cartographic Rosoao ch, and the Directorate of Science and Technology. Topics rocluiring more comprehensive treatment and therefore published separately as Special Reports are li stod In the contents. 8 The Middle East: Reflections; Geneva 11 Rhodesia: Impasse; Trade Routes 13 Angola: Donnybrook Begins 14 The Kurds: Time Runs Out 16 Portugal: Campaign Begins 17 Turkey: A New Government 18 Mexico: Visiting VIPs 19 Chile: Bracing for Winter 20 Argentina: Labor Discontent Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 1 Cambodia: The Deteriorating Situation 4 Vietnam: Disorder and Confusion EAST ASIA PACIFIC 5 Indochina: Asian Reactions 7 Indonesia: The Oil Bonanza MIDDLE EAST AFRICA WESTERN HEMISPHERE Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 E SECRET Cambodia: The Deteriorating Situation A little more than five years ago, Presidert Lon Nol assumed the man'le of leadership in Phnom Penh amid an impressive show of politi- cal support and a popular rush to arms to de- fend the new republic. The general relief and sound of exploding rockets that marked his departure from the capital this week testify to the depth of his misfortunes-and those of his government. Lon Nol and the group of officials and dependents accompanying him ,:,re sched- uled to spend ten days on Bali as the official guests of the Indonesian government and then go on to the US. Lon Nol has not resigned, and Senate presi- dent Saukham Koy is taking over his functions in accordance with the constitution. Saukham Kay and Prima Minister Long Boret-who is with the presidential party in Bali but plans to return ho Phnom Penh-have both expressed hope that some compromise setflement can now be arranged with the Khmer communists. So far, however, there is no sign that the insurgents are willing to accept any arrangement other than a total government surrender. Lon Nol was hardly airborne when Phnom Penh got some more bad news-the communists had taken Neak Luong and Banam, the last two government holdings on the lower Mekong River. Over 4,000 government troops and tens of thousands of refugees were in the two towns but, so far, only a hatidful of survivors have reached Phnom Penh. The fall of Banam and Neak Luong will enable the communists to move a substantial portion of the 6,000 to 7,000 insurgent troops along the lower Mekong to Phnom Penh. Com- munist commanders have presumably begun calling in all available units in order to increase their attacks against the capital city. Although the US airlift to Pochentong airport is con- tinuing despite daily shellings, the time is Page rapidly approaching when ammunition stocks earmarked for Cambodia under present aid ar- rangements will be exhausted. Under these con- ditions, the government could fa:; before mid- month. The Rebel Leadership In the , *ngs, insurgent leaders and their administrative apparatus stand ready to take the reins of power in Phnom Penh- The National United Front of Cambodia and the Cambodian People's National Liberation Armed Forces were created five years ago as the overt administrative and military organizations of the insurgency. Although Sihanouk's Royal Government of National Union may eventually be installed in Phnom Penh, to date it !gas had no significant role in Cambodia,, serving merely as the institu- tional conduit for the insurgents' external rela- tions. The insurgent apparatus within the coun- try is controlled and directed by the Khmer CommunisL Party, which traces its origins back to the early 1950s and Ho Chi Minh's Indochina Communist Party. From a handful of leftist revof,tionaries and senior Cambodian cadre from the Viet Minh, the Khmer party has ex- panded to a membership of over 10,000 led by about 20 central committee members. Party leaders occupy virtually all key posi- tions in the front and its mass organizations from the national to the ljcal level, and party cadre Form the backbone of the insurgency's military arm. The composition of the party lead- ership-the central committee-remains a closely guarded secret, however. Sihanouk's "defense minister" and "deputy prime minister," Khieu Samphan, is the best known of the senior leaders, but it is generally believed that Saloth Sar is the party secretary general and probably outranks Khieu in the central committee. Widely traveled leng Sary-who now handles most direct contacts with Peking and Hanoi- also appears to occupy a strong position in the committee hierarchy. SECRET 1 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET From left to right, front: Hou Ytion, Sihanouk, Khieu Samphan, Hu Nim, and len gSary The picture of the rest of the central com- mittee is dim. It includes a couple of better known individuals such as Hou 'Yuon and Hu Nim; many lesser knowns such as Son Sen, Nuon Chea, Sok Thuok, Chou Chet, Tiv 01, Koy Thuon;. and a group of virtually unknown insur- gent military commanders and regional party chairmen. Their relative ranking is a mystery. Kou Yuon and Hu Nim, for example, are given broad propaganda coverage, but two knowl- edgeable defectors claim that they actually wield little power. Given the emphasis on the "armed struggle," it would seem only natural that military leaders like Nuon Chea and Son Sen would have more clout in the central com- mittee Lhan their civilian colleagues. All known central committee members are fairly young-still in their 40s. Most qualify as Cambodian intellectuals ind were educated dur- ing the 1950s in France-where they got their leftist if not their communist ideology. They subsequently worked as journalists or teachers. Khieu Samphan and Hou Yuon, in fact, have doctorates in economics. A significant number have had considerable experience in politics: Khieu Samphan, Hou Yuon, and Hu f\lim held cabinet portfolios under Sihanouk during the 1960s. Almost all the Known or suspected party leaders are remembered as tough nationalists and articulate, unyielding ideologues even be- fore their active involvement in the insurgency. Another collective trait appears to be long- sanding opposition, and in many cases personal enmity, toward Prince Sihanouk. Saloth Sar, ieng Sary, and Son Sen, for example, are among a number of current communist leaders who fled into the bush in 1963 fc!sowing one of Sihanouk's periodic crackdowns on his leftist opposition. Despite sometime. intense persecu- tion by the prince, 'thers such as Khieu Samphan, Hou Yuon, and Hu Nim stuck it out until 1967 before boiling the capital. All these common bonds can only have grown stronger as the result of five years of successful prosecution of the war. The party leaders have had their differences, but they have SECRET Page 2 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 also worked together once a decision is reached. Given the apparent intellectual sophi? tication of most of the leaders, it is not surprising that there is some evidence of differences oil international communist issues. One clearly defined area of friction has been the question of the party's ties with Hanoi. The relationship with the Vietramese commu- nists has always been ambivalent. Hanoi nur? tured the Cambodian party while Sihanouk was in power, and the ties became even closer after the Vietnamese increas:~d military support dur- ing the initial years of the current conflict. From the beginning, however, Hanoi has had to buck an undercurrent of Khmer suspicion and distrust rooted in Cambodia's historical ex- perience with Vietnamese expansionism. As the party assumed responsibility for its own military and political affairs in recent years, its Viet- namese connection appears to have become even more contentious. may involve some practical considerations: North Vietnam's ability to extend postwar reconstruction aid to a communist-controlled Cambodia would be limited, while Peking would be in a position to provide liberal as-istance to help rebuild the country's war-torn economy. The leadership's now apparent willingness to retain Sihanouk as a nominal postwar leader also seems to have been dictated by future needs. Party leaders have long recognized that the prince has given their move.nent a legiti- macy both inside and outside Cambodia that it would not oth,.rwise have had. During a period of postwar con-oiidation, Sihanouk's value as a domestic rallying point and his ability to attract international recognition and economic support will hElp. The prince's close relationship with Chinese leaders was probably a consideration, and the party may, in fact, have been under some pressure from Peking to retain Sihanouk. Nevertheless, the decision to accept even a severely circumscribed postwar role for Siha- nouk must have been a bitter pill for many leaders. The prince symbolizes the old order under which many party leaders suf'tred and which the party has been struggling to replace with a revolutionary order. The party leaders 25X6 adroit political operator, and they The party's already discernible drift toward some middle ground between Peking and Hanoi are probably more than a little suspicious of his in!entions and of his capability to make mis- chief for the party. Sihanouk, for his part, appears painfully aware of the party's attitude toward him. His recent claims that he will not involve himself in postwar domestic affairs, limiting his activities instead to the sphere of foreign relations, may in fact reflect the arrange- ment he has been forced to accept as the price for any role. Similarly, his frequent references to the possibility of an early retirement prob- ably reflect Sihanouk's recognition that his usefulness will decline and the pressures to jettison him will increase as the party gains confidence in its ability to rule and as the new regime's international position becomes estab- lished. Page 3 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Vietnam: Disorder During the past week, communist forces have seized) most of the remaining government areas in Military Regions 1 and 2 as Saigon's forces continued to fall back in disorder and contusion. The chaos of Da Nang, complete with milling crowds of refugees and shootouts between deserters and local police, was repeated on a smaller scale in Nha Trang and other towns along the central coast. It appears that most of the equipment of government forces was left intact and is now in the hands of the communists. Some weapons and military stores were destroyed by well- disciplined individuals before they evacuated, but most of the heavy guns, trucks, tanks, and masses of lighter weapons were apparently aban- doned in haste. For the first time since the North Vietnamese came south in strength, they will probably be able to drive straight down routes 14 and 1 toward Saigon. The communists have moved quickly to control the populations abandoned by the gov- ernment. At least a few cadre with bullhorns reportedly moved through the streets of Da Nang even before communist forces had come into town, asking the people to stay and coop- erate with the new authorities. Two weeks ago, a communist broadcast offered good jobs to officers defecting from the government side. For the time being, at least, the communists are giving first priority to essential services. So far, there has been little sign that Hanoi intends to expand the role of the PRG beyond the diplomatic field, where it has been used to attract foreign support for the communist cause in South Vietnam. There have been no an- nouncements yet of a new PRG local adminis- tration in Pleiku, Da Nang, or any other recently captured city, nor have the communists estab- lished an interim capital for South Vietnam in any of the major cities now in their hands. So far, the panic that precipitated the col- lapse to the north has not yet become evident Family being lifted aboard refugee ship among the divisions protecting Saigon. Although the senior military leadership in Saigon seems to be providing little guidance to regional and field commanders, a number of these local com- manders are making personal appearances in the field and generally encouraging their men to make a stand. Details of recent developments in the northern provinces, however, are trickling into Saigon and the will to fight of Saigon's remaining forces will be tested. President Thieu's prestige has been ir- reparably damaged and his effectiveness under- mined by a growing sense of inevitable com- munist victory. Moves to force Thieu's resig- nation or ouster could occur at any time, but a change in leadership probably will not reverse the fundamental political and military trends now running against Saigon. A new government presumably would be prepared to seek and accept the best terms !t could obtain from the communists. In the event of a rapid South Vietnamese military collapse, however, even the possibility of a transitional non-communist administration would disappear. SECRET Page 4 WEEKLY SUMMARY Apr 4, 75 lassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET INDOCHINA: ASIAN REACTIONS Events in Cambodia and South Vietnam are generating reactions elsewhere in Asia that range from relative indifference to serious con- cern. Even in Peking, the developments of the past two weeks are being viewed as a sort of mixed blessing. China is taking two different and some- what contrasting i;nes on Cambodia and Viet- nam, reflecting firm support for the insurgent effort in Cambodia, but manifesting a more reserved and less supportive view of Hanoi's offensive in South Victnam. Chinese press coverage on Cambodia emphasizes the "inevitability" of a rebel victory and gratuitously advises the US to terminate its involvement there before suffering additional embarrassment. By comparison, Peking's treat- ment of events in Vietnam is cautious, relying almost exclu-ively on North Vietnamese and foreign press re:oorts. This caution on Vietnam probably reflects concern about the possibility of increased North Vietnamese and, more im- portant, Soviet influence throughout indochina as a result of recent communist successes. Peking will continue its efforts to expand is influence with both Sihanouk and the Khmer communists, not only to counter Hanoi but to impede possible Soviet incursions. The less enthusiastic view of the deterio- rating situation in South Vietnam is also due in part to Peking's concern that increased public support to Hanoi could have an adverse affect on Sino-US relations. The Chinese will not aban- don their equities in Hanoi, however, and can be expected to increase attention to Vietnamese developments as the situation continues to deteriorate. For example, the first authoritative comment on the current offensive provided lukewarm support to Hanoi end was mildly critical of the US. Moreover, a North Viet- namese delegation headed by Politburo member Hoang Van Hoan arrived in Peking in late March and met with Vice Premier Yeh Chien-ying, presumably to discuss the situation in Vietnam. Although most non-communist Asian countries expected that Hanoi would eventually dominate all of Indochina, the rapidity of the deterioration of the past two weeks has come as something of a shock. Since the late 1960s, many Asian governments have been gradually adjusting to the prospect of diminishing US involvement in the region, and of the need for accommodation with the communist powers. The collapse of non-communist governments in Indochina will not alter the fundamental process of adjustment, but it may force some accelera- tion of the pace. Thailand is feeling a greater impact than any other country. The Thai will not regard a communist take-over in Cambodia and South Vietnam as an Immediate threat to their secu- rity, but they are concerned over the long-term implications of potentially hostile neighbors along their eastern border. Bangkok will un- doubtedly speed up the efforts already under way to disengage from US policies in Indochina, possibly by demanding an early halt to the Thai-based US airlift to Phnom Penh. While try- ing to preserve basic good relations with the US, Bangkok may also press for a firm agreement on US troop withdrawal. The Thai are exp;oring the possibility of strengthening the Association of Southeast Asian Nations as an alternative to relying on the US, and they plan to convene a meeting of the association's foreign ministers in Bangkok to discuss a common strategy on Indo- china. The Thai may also try to advance their timetable for recognition of Peking and to renew approaches for a dialogue with Hanoi. In Japan, despite the widespread shock and conflicting editorial advice emanating from the press, the government is reacting to develop- ments in Indochina in a relatively even-handed way: ? Economic aid is being directed toward assisting refugees and away from projects that even indirectly contribute to the military potential of either side. Page 5 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 7,4 South Vietnamese Marines evacuate Da Nang ? A new ambassador has been named to Saigon, in a business-as-usual gesture. ? Talks are continuing with Hanoi on economic aid and the opening of an embassy there. ? President Lon Not has been refused permission to reside in Japan, but the gov- ernment is actively supporting efforts to get Cambodian negotiations under way. In broader terms, Japan has never felt its security to be directly tied to events in Indo- china, and its current diplomatic posture will permit accommodation with whatever regimes emer a in the region. Unlike Japan, the South Korean govern- ment has always seen important parallels between its own security situation and that of South Vietnam-though not Cambodia. Recent events have added to persistent concerns among South Koreans that the US miqht some day fail to meet defense commitments to their country. Official concern is expressed fairly openly in the controlled press which lectures the US for not supporting its allies in Asia, causing "catas- trophe" in the region, and encouraging Asian communist aggression. In seeking informal reas- surances from their American counterparts, however, officials in Seoul are more guarded, draw distinctions with the South Vietnamese situation, and express confidence in South Korea's ability to defend itself. Their main con- cern at this point is the possibility that North Korea might be tempted to escalate its cautious air and sea penetrations into South Korean operational zones, creating a major test of US resolve to resist communist military intrusions. The North Koreans, for their part, have been among Hanoi's closest friends and are clearly exultant over communist successes in South Vietnam. The Chinese Nationalists on Taiwan are also fairly critical of the US role in Indochina, with the local press accusing Washington of fail- ing to recognize and effectively deal with what the Nationalists characterize as communist "tricks." Although clearly shocked by the rapid deterioration in South Vietnam and pessimistic about the prospects in Indochina generally, the press has been careful to avoid linking US "abandonment" of its allies there with the more important concern about the US commitment to Taipei. ~ Page 6 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 INDONESIA: TILE OIL BONANZA A $4-billion rise in oil earnings has given Indonesia its best two years of growth-8-10 percent a year in both 1973 "yid 1974. As re- cently as the mid-1960s, the national economy was debt-racked and stagnant. The Suharto regime then rearranged its national policies and debt schedules, leading to an annual average growth for 1967-72 of 7 percent. The recent acceleration results from the dramatic boosts in oil prices, an increase in the government's contractual share of oil revenues, and a 29-percent jump in oil output. The aug- mented oil revenues supported stepped-lip spending on development projects, _,!ary in- creases for government workers, the enlarge- ment of national food stocks, greater imports of consumer and producer goods, and a build-up of foreign exchange reserves by nearly $1 billion. This year, Indonesia should achieve real growth of about 7 percent, despite the global recession. Increased imports of machinery and raw materials will promote rapid growth in agri- culture, manufacturing, and the service sectors. Although the volume of exports will probably not grow this year, inflows of aid and private capital point to another sizable surplus in inter- national accounts. SECRET would probably break out of the OPEC cartel rather than accept a pro-rationing scheme that would cost them substantial development gains. Jakarta will continue its efforts to develop other sectors of the economy. In agriculture, increased use of high-yield rice varieties, chem- icals, irrigation, and new techniques should support a growth rate of 4-5 percent a year. Manufacturing will probably grow about 10 percent annually, faster than in any other period in Indonesian history. Both foreign and do- mestic investment should rise rapidly in proc- essed foods, metal fabrication, finished lumber, and chemica;s. Beyond 1978 the course of Indonesian growth will depend heavily on the international oil market. If prices remain unchanged in this period, Indonesia will probably be able to sustain the 1976-78 performance, meet its scheduled debt payments, and end the decade with ample foreign exchange reserves. This path would not require concessionary aid com- mitments beyond those already made, although it would entail official borrowing on near- commer-ial terms or. the order of $300 million annually. As the industrial world recovers from reces- sion in 1976, Indonesian exports should again begin to grow at a rate adequate to permit sustained national output growth of 8 or 9 percent. Oil and natural gas revenues could nearly double by 1978. The Indonesians have adopted policies encouraging the oil companies to push production vigorously, and an increase of 60 percent is clearly within reach in terms of resources. Indeed, the Suharto government Despite the encouraging growth outlook, per capita income will be only about $200-$225 in 1980, compared with the current $150. The country will also continue to experience high levels of urban unemployment, intermittent pressure on the government to reduce the gap between rich and poor, and problems in transportation and communications that will inhibit development of national markets Oil rig assembly yard SECRET Page 7 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 THE MIDDLE EAST FURTHER REFLECTIONS Initial recriminations in Egypt and Israel over the breakdown of disengagement negotia- tions have been tempered during the past week as each side has contemplated the impli- cations--in terms of diplomatic stagnation and possible military action-of an end to US media- tion. President Sadat set a tone of moderation in a major address on March 29. Since then, spokesmen for both Egypt and Israel have spoken openly of possibly reviving the disen- gagement talks under US auspices. At the same time, Cairo went ahead and officially requested the US and the USSR, co-chairmen of the re- cessed Geneva peace conference, to reconvene the plenary talks. In his speech, President Sadat hinted at a continued interest in US-sl'unsored bilateral negotiations, noting that Geneva is not the only framework Egypt has in mind for negotiations. In a later endorsement of Sadat's speech, the Egyptian People's Assembly repeated the oblique reference and added an explicit call for continued dialogue with the US. Unofficial spokesmen have told the press directly that Egypt would like to resurrect the bilateral talks. The Israelis, too, have expressed an interest in resuming indirect bilateral talks with Egypt under US auspices before the conference recon- venes. Although Tel Aviv remains convinced that its final posit;on before the disengagement negotiations broke off last week was correct, Prime Minister Rabin reportedly has ordered the high-level preparatory group he formed for those negotiations to continue its work and to come up with new negotiating proposals SECRET Page 8 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 V~V.4 - 9 Egypt's formal request, on April 1, that the multilat-ial-negotiations at Geneva be recon- vened was clearly an effort to keep all avenues open---and to pr^-empt criticism from other Arabs who have disparaged Sadat's sole reliance thus far on bilateral talks. Foreign Minister Fahmi announced that Egypt would also like to involve the UK, France, and at least one" non- aligned country in the conference. The Egyp- tians apparently believe that broader partici- pation will not only place greater pressures on Israel, but might also provide a safeguard against what President Sadat calls "polarization" of the super powers' positions. Sadat set the scene for the appeal to out side powers with his speech last weekend, which launched a major diplomatic offensive. His announcement that he would reopen the Suez Canal on June 5 and extend the UN Emergency Force mandate in the Sinai Peninsula for three months beyond its scheduled expiration date of April 24 seemed intended to demonstrate his continued desire for peace. He directed his remarks in such a way as to place an obligation on "the world" and on Israel to help him attain it. Sadat deliberately played down militancy and attributed his decisions to concern for world reaction. Rejecting policies inspired by anger and emotionalism, he stated his belief that Egypt cannot be responsible either for con- fronting "the international community" with a sudden crisis by canceling the UN mandate in April or for depriving the "peoples of the world" of the important Suez Canal trade route. By thus addressing himself to internatio~ opin- ion, he seemed to be saying that the interna- tional community must return the favor by pressing Israel for negotiating progress. Sadat undoubtedly also intended that his decisions should put a burden on Israel to move toward peace and refrain from military provo- cation. A reopened canal could to some extent serve as a restraint on Israel as well as on Egypt against renewing warfare, and the decision to extend the UN mandate will place equal obli- gation on each side to abide by the cease-fire. Despite a generally lukewarm reaction to the specifics of Sadat's proposals, the Israelis reportedly believe that his speech strengthens the possibility that separate pre-Geneva talks with Cairo can be held. The rest of the Arab world, on the other hand, has reacted to Sadat's speech with silence, probably indicating a gen- erally negative attitude. Sadat did not clear his decision on the UN mandate with Syria, whose mandate on the Golan Heights expires at the end of May, and the Syrians are probably once again resentful of his tendency to make major decisions unilaterally. Only hours before Sadat delivered the speech, Damascus radio stated that Egypt and Syria had decided not to renew either mandate unless "tangible" progress had been made toward achieving Israeli withdrawal. Palestinian leaders, momentarily pleased at the breakdown of talks between Egypt and Israel, were alarmed at Sadat's reaffirmation of essentially moderate policies on March 29. The Palestinians are again worrying that Egypt might still attempt to reach a unilateral agreement with Israel, and that any ;uch agreement would ignore Palestinian interests. Palestine Liberation Organization leaders feel threatened even by Egypt's moves to renew the UN mandate and open the canal. These initiatives draw attention to differences between Egyptian and Syoao policy, and to the fact that the Palestinians, to their immense discomfort, are caught in the middle. Page 9 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SUEZ CANAL If the Suez Canal is reopened as early as June, the waterway will have less capacity than it had before it was closed in mid-1967. Night transits will be impossible and day operations curtailed because new navigation lights and systems for ship monitoring and communications are unlikely to be installed before October. Ships using the waterway duh ing the first months after it reopens will be limited to drafts of 35 feet, rather than tha 38 feet permitted before the canal was closed. The Canal Authority has worked out a temporary traffic control system and has trained a cadre of pilots. In a dry run during the first week in March, operations reportedly went smoothly. Before June, the British are to carry out a precautionary final sweep for explosives. This check is intended to reassure potential users and to dispose of any explosives thrown into the waterway by Egyptian land forces who cleared the shore- line. The Soviets are continuing to call for a resumption of the Geneva talks, but they seem to have reservations about rushing balk to the negotiating table without a clear indication of where the chips may fall. Although Moscow's propaganda broadcasts are aimed at keeping events moving toward Geneva, in private the Soviets still seem to have doubts about when and if the talks wi!I be resumed. So far, the Soviets have not even com- mented on the Egyptian proposal for a return to Geneva. The Egyptians introduced an unex- pected complication by suggesting that addi- tional parties be invited-an idea that probably did not sit well in Moscow. ;n addition, the Soviets probably have a lingering fear that the US will continue to play a dominant role, even at Geneva. Last week, Y. D. Pyrlin, deputy chief of the Foreign Ministry's Middle East division, told a US official that the Arabs have not yet clarified their positions ind that Moscow does not expect to know where things stand before mid-April. The question of Palestinian representatior at Geneva and the broader problem of Pales- tinian disunity still trouble the Soviets. Pyrlin complained that the Soviets, who publicly recognize Arafat's leadership, cannot confer with the Palestinian leader unless members of his entourage are present. The Soviet official gave no sign that Moscow has a clear idea of how to get around the representation problem, but he did say that an effort is being made to schedule a visit to Moscow by Arafat in April. Discussing Soviet-' 'gyptian relations, Pyrlir. confirmed that economic talks have been suspended, but that the Soviets expect them to resume by late April or early May. The main issues remaining are Egyptian debts and the integration of Soviet-Egyptian joint .: ojects into Moscow's new five year plan. Pyrlin added that General Secretary Brezhnev would prob- ably not o to the Middle East before autumn. 25X1 SECRET Page 10 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 t Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET he role of the African mediators has evoked accusations from some other African states that they are sacrificing African interests and aiding Smith by cooperating with Vorster. Last week, Zambia's President Kaunda risked additional African criticism when he boldly rounded up many Zambian-based Rhode- sian insurgent leaders arid ordered the constitu- ent groups of the African National Council to terminate the separate organizational structures and facilities they have maintained in Zambia, despite their agreement in December to merge into the council. If Kaunda has effectively clamped down on the insurgents' bases in Zambia, he may be in a position to forestall an early resurgence of guerrilla attacks in the wake of the Sithole deci- sion. On the other hand, Kaunda may find it politically untenable to resist any new African pressures to step up the insurgency. Prospecls for a complete cancellation of settlement negotiations between Ian Smith's white regime and bfa.:k Rhodesian nationalists increased this week as a result of a ruling against a major black leader by a court in Salisbury. The deepening impasse poses hard choices for South African Prime Minister Vorster and the leaders of the four black states who have been collab- orating for months in a joint effort to rnediale a solution. On April 2, a special Rhodesian tribunal declared that the government's re-arrest of Ndabaningi Sithole a month ago-he had been rc eased from ten years' confinement only last December-and his detention without trial were "fully warranted." The court did not rule on tie accusation made by Smith's aides when Sithole was picked up, that he had plotted to kill rival leaders of the nationalists' African National Council. Instead, Sithole's detention was upheld on the basis of evidence-withheld from the public hearing before the tribunal last week- that lie had encouraged terrorism by Rhodesian guerrillas and thus had undermined the true agreement the Smith regime concluded with the nationalists last Dccembe, The change in the government's approach, which became apparent at the hearing, was almost certain;y dictated in part by a weal-, case against Sithole on the plotting accusation. The broader charge is probably also viewed as likely to increase support among Rhodesian whites for the action against Sithole. Smith apparently is unconcerned-indeed, he may be glad-that the judicial decision makes more difficult a face- saving compromise between his regime: aed Sithole's colleagues on the council, who gave vowed not to resume even preliminary talks with Smith until Sithole is freed or tried pub- licly. Smith went along with the truce and settlement effort only reluctantly, because of pressure from Vorster. Vorster is surely highly displeased by Smith's apparent determination to keep Sithole cinder detention. At a meeting last month, Vor- ster is believed to have Icanerl hard on Srnith to release the black leader. Now, Vorster must either bring more effective pressure to bear oil Salisbury- he has potential economic leverage in addition to the withdrawal of South African police units from Rhodesia, which is already well advanced--or risk seeing his policy of de- tente with black Africa go down the drain. He has committed much of his prestige to the policy. The African mediators, who have similarly invested their prestige in the settlement attempt, had counted on Vorster to prevail on Smith to resolve the Sithole case satisfactorily. Apr 4, 75 Page 11 WEEKLY SUMMARY !Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 I Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 y JLC,,I\L 1 TRADE ROUTES THREATENED Rhodesia could lose its vital Irade routes through the ;ports of I._ourerrco Marques and Beira unless a constitutional settlement pro- viding for black majority rule is worked out by June, when Mozanibiclue becomes fully inJel;err- dent from Portugal. Mozambique benefits substantially hone the rail and port earnings it derives from handling Rhodesia's over seas trade. So far, Mozambique's trill rs,itional government, which is dominated oy the black Front for the Libera- tion of Mozambique, has not applied the UN economic sanctions against Prime Minister Smith's regime. Front President Samora Machel is clearly aware, however, that after indepen- dence his country will be subject to increased foreign and probably irresistible pressures, especially from other African states, to partici- pate in the sanctions. The impact of losing the Mozambique out- lets would be severe as the two ports handle the overwhelming majority of Rhodesian track The alternative routes, two rail Ines and two r;.~ads, would have to be substantially upgraded inside Sc uth Africa and Botswana to handle the in- crease in Rhodesian traffic. Moreover, South African facilities already are heavily congested. As many as 4U ships have been lined rep at the major cast coast harbor at Din-ban, and Pretoria is unwilling to disrupt its own domestic services to accommodate diverted Rhodesian goods. As a result, the loss of the Mozambique port': probably would force Rhodesia to cut its trio by more than half. Export earnings, mainly from agriculture, rr,ining, and mineral processing, account for about 25 pc. cent of Rhodesia's gross domestic product. A reduction in imports would not only cut into the delivery of parts and equipment needed to maintain capi- tal stock but would also tin iit the supplie- cr fuel and raw materials for industry. Rhodesia is self-sufficient in most foods. Rhodesia faces other significant economic problems that will probably slow economic growth this year even if Mozambique leaves the true routes open. Unfavorable weather during the current growing season will result in a sub- stantil reduction from last year's record har- vests. Falling prices for Rhodesia's raw-material exports will reduce income from trade A 10- percent tax surcharge, imposed in SeptemLer to help pay increased military costs, will tend to dampen consumer demand. Moreover, the high cost of oil and other imports will continue to aggravate inflation, which doubled last year to about 7.5 percent. immigration dropped to 600 persons in 1974 compared with 1,640 in 1973 and 8,840 in The increasing economic troubles will re- duce Rhoc,-sia's attractiveness to white immi- grants, who fill skilled and professional positions that are largely denied to blacks. A public rela- tions program mounted early in 1974 to in- crease white immigration has been a failure-net 1972. The white birth rate has been falling and is now less than 1 percent annually. Slowing growth in the economy will also retard the ex- pansion of job opportunities for blacks, which are already barely keepir.g pace with the rowth of the black population. Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 eclassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET ANGOLA: DONNYBROOK BEGINS 'fhe transitional regime, in office less than three month;, has been badly shaken by almost two wcx~ks of intermittent clashes between aimed members of the two largest of the three nation- alist groups that share power in the government. Lac:h group appears heent on gaining military dominance over the other before Angola becomes independent next November. Their rivalry c')uld culminate in cavil war well before then. The fighting, which broke out on March 23, has set (partisans of the National Front for the Liberation of F,ngola against those of the Popular Movement for the Liberation of Angola. Most of the violence has been centered in black slum areas of L.t.randa, the capital, although fighting has occurred elsewhere. Atrocities by both sides- have been plentiful; on March 25 or 26, for example, National Front troops captured and then massacred 49 soldiers and civilians of the Popular Movement. At times, the exchanges of fire have been heavy, with mortars, bazookas, rocket-propelled grenades, and heavy machine guns employed. Altogether, more !Fran 200 persons have been killed. Portuguese soldiers, who are looking ahead to their departure over the next year, have had only limited success in curbing the fighting. They have been assisted by troops of the Na- tional Union for the Total Independence of Angola-the third group in the transitional gov- ernment--which is striving for a law-and-order image. On March 28, a cease-fire agreement was signed following mediation by Portuguese For- eign Minister Ant rnes and Inter-territorial Minis- ter Santos. The agreement has been consistently violated by both sides, however, and seems t n- likely to take hold. The two contending groups have been bitter rivals for more than a decide. Ever since their struggle against Lisbon ended some months ago, each has suspected the other of preparing for civil war, and both have been building up their forces. At the time the fighting broke out, the National Front had an estimaed 2,000 troops in the capital--twice as many as the Pop- ular Movement. To offset its numerical disad- vantage, the Popular Movement armed many untrained civilians, mainly unemployed teen- agers. Und^r the terms of the cease-fire agree- ment, the nationalist groups are each to Ii roil their troop strength in the capital to 500 men. So far the National Front has refused to reduce its force until all civilians have been disarmed, as also called for in the agreement. Moreover, the National Front reportedly is bringing reinforce- ments-and more weapons-into Angola from its base in neighboring Zaire, where it enjoys strong backing from President Mobutu. The Front, however, apparently has no immediate intention of moving these troops into the capital. Disarming the civilians could prove to be an impossible task even if the Popular Mc, ve- mant were to cooperate, which hardly seems likely. Most civilians would probably hide their weapons rather than give them up. The Portu- guese army, which is trying to remain neutral, is unwilling to take on the responsibility for con- fiscating illegal weapons. Under the circu in- stances, Angola is almost certainly in for an extended period of internecine violence that will reinforce long-standing hatreds and the desire for revenge. Page 13 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 1r( Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET The border between Iraq and Iran was closed on schedule this week upon the expira- tion of Baghdad's cease-fire with the Kurdish rebels and of the amnesty it had offered to those who surrendered by April 1. 'The closure, which halted the heavy flow of military and civilian refugees from Iraqi Kurdistan, was carried out in accordance with arrangements made by Baghdad and Tehran after they con- cluded their reconciliation accord in Algiers early last month. An Iraqi force of about 100,000 troops began moving promptly to eliminate remaining pockets of resistance and to establish control over all Kurdish-inhabited areas of Iraq. Early reports indicated that the force was encounter- ing little opposition. The approximately 9,000 rebels who last month vowed to continue the struggle are only lightly armed and appear to have little prospect of getting new supplies. According to a press report, approximately 90,000 Kurds have concentrated in the far north of Iraq adjacent to Turkey, hoping that Ankara will reverse its decision denying them asylum. Some stranded refugees reportedly surrendered just before the amnesty expired. The Iraqi government has agreed to accept, for an additional month, Kurdish refugees in Iran who want to return to Iraq. The extension was apparently requested by Iranian Prime Min- ister Hoveyda during his visit to Baghdad last week. Tehran was already providing shr.~Iter for some 140,000 Iraqi Kurds before its accord with Baghdad and is anxious for as many of these earlier refugees to return home as can be per- suaded. The displaced Kurds are an adminis- trative headache and also a potential security problem for Iran. An Iranian official estimated on April 1 that about 200,000 Kurdish refugees were in Iran. Baghdad, for its part, is not very anxious to have any of the refugees return. To accom- modate Tehran, an Iraqi Red Crescent team went to Iran last week to interview refugees and offer reassurances that they would not be sub- ject to reprisals if they came back. A US official in Iran reported later that the trip was a failure from the Iranian point of view. Hoveyda's trip to Baghdad again under- scored the public commitment of both sides to a smooth implementation of the Algiers accord. In a communique, issued after 1-loveyda's depar- ture, the two countries expressed satisfaction with the progress of their rapprochement and pledged to work for closer cooperation in all areas. According to an interview with Iraqi strong man Saddam Husayn Tikriti in a Tehran newsaper, cooperation may even extend to some kind of collective security arrangement in the Persian Gulf. The statement attributed to Saddam Husayn goes well beyond the official communique, which said only that the two sides "affirm that the region should be spared all foreign interference." Until the recent accord, Baghdad was actively promoting gulf security arrangements directed specifically against Iran. There has been no official Iranian com- ment on the interview. The Shah has, however, frequently spoken of his desire for security co- operation among Persian Gulf countries, arguing that defense should be the responsibility of the littoral states. Up to now he has excluded Iraq from such an arrangement and has supported the US naval presence in the gulf as a counter to S::viet naval activity in the area. He has con- sidercd this activity-and, indeed, Soviet influ- ence in Iraq-a threat to the security of both Iran and the gulf. Reducing Soviet influence continues to tie one of the Shah's principal foreign policy goals. He probably hopes to use his accord with Sad- dam Husayn-and the resulting collapse or the Kurds' rebellion-to press Baghdad, directly and through other Arab governments, to reduce its reliance on Moscow. The Shah, in turn, will almost certainly be called upon, at least by the more radical Arabs, to demonstrate that Iran is not a mouthpiece for US policy in the area. Page 14 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 PORTUGAL: CAMPAIGN BEGINS After two postponements, the campaign to elect a constituent assembly officially opened on April 2. The ruling Armed Forces Movement, however, lost no time in demonstrating that it plans to dictuie the provisions of the new con- stitution to the popularly elected assembly. Thus far, the election campaign has been free of the harassment of democratic parties that had marked political rallies in recent weeks. Charges by the Communist Party and an ultra- leftist student group, each claiming that the other attacked its headquarters, are the only incidents reported so far. Last week, the Revolu- tionary Council established stiff penalties, in- SECRET chiding jail sentences and fines, for anyone at- temptinq to disrupt the campaign. It also out- lawed permanently the uIhaleft s,l Reorganizing Movement of the Proletarian Party, a major offender in earlier incidents. The election scheduled for April 25 is the first opportunity for the Portuguese people to express their views on the revolutionary policies being pursued by the Armed Forces Movement. Moderates have been hoping for a strong showing by their parties in order to convince the Movement that its more radical policies have no popular support. They also hope to demonstrate that the communists and their sympathizers have representation ire the government greatly out of proportion to their standing with the electorate. On April 3, the Movement took another step that seems designed to reduce the role of the constituent assembly that will be elected. It gave political parties 48 hours to approve a plan that reportedly will ensure continuing military dominance of Portugal's affairs for three to five years. Although details have not been released, the Movement's plan probably spells out provi- sions of the new constitution dealing with its own role. Under the terms of the Movement's proc, any issued immediately after the coup last April 25, the popularly elected constituent as- sembly was to have been solely responsible for drafting the constitution. In another important development this week, Prime Minister Goncalves established a council within his newly appointed cabinet. The body will be composed of Goncalves, the four ministers without portfolio representing the four coalition parties, three military ministers, and the minister of information. This council will meet weekly to set legislative policy, and its decisions will be ratified by the full cabinet. While the measure is primarily a move to in- crease efficiency and to minimize inter-party conflicts, it also could be an effort to lessen disagreement over legislation that the Movement SECRET Page 16 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 TURKEY: A NEW GOVERNMENT With the formation of a four-party right-- of-center coalition, Justice Party leader Suley- man Dernirel took over the reins of government from Prime Minister Sadi Irmak on March 31. Demirel will present his government program to parliament on April 6 for debate and a confi- dence vote. He has a narrow majority in parlia- ment, but Former prime minister Ecevit is waging an intense campaign to split off some of his support and defeat him. Even if Demirel fails to receive a vote of confidence, he would stay on in a caretaker capacity until another government could be formed. The new government is built on a shaky foundation. Demirel must depend on support from outside his coalition for a majority. The coalition itself is fragile, based primarily on the shared opposition of the four rightist parties to Ecevit's left-of-center Republican People's Party. In addition to Demirel's Justice Party, the cabinet includes the National Salvation Party, the Republican Reliance, and the National Action Party. Demirel is likely to run into trouble in trying to work with Salvationist leader Erbakan and National Action leader Turkes, both of whom were appointed deputy prime ministers. It was Erbakan's erratic and obstructionist be- havior as Ecevit's coalition partner that brought down the government last September. Turkes has been associated with right-wing extremists, and his party claims to have 100,000 "com- mandos" at its disposal. The presence of these two parties in the government is likely to con- tribute to further political polarization and raises the possibility of increased violence. Outbreaks of violence by opponents of the new government could work to Ecevit's advan- tage in his effort to prevent Demirel from gain- ing the vote of confidence. -cevit's prima; y interest is in getting parliament to call early elections, which he still believes he would have a good chance of winning. If Demirel succeed, on the other hand, he is not likely to move to elections unless his coalition runs into trouble. No sharp turns in Turkish policy are likely under Demirel, although his coalition partners will probably try to move him further to the right and press him to harden the government's stance toward a Cyprus settlement. The Na- tional Salvation Party will be in a better position to influence government policy on domestic matters than on foreign affai -s because the Justice Party gave the Salvationists several im- portant economic portfolios. In foreign affairs, Demirel will have the assistance of Foreign Minister Ihsan Caglayangil of the Justice Party, who served in that same post in an earlier Demirel government. The de- fense minister, Ferit Melen of the Republican Reliance, is also capable and respected. He served as both defense minister and prime min- ister in the period following Demirel's ouster by the military in 1971. Clarifying his policy toward a Cyprus set flement, Demirel has announced that the "only solution is a two-zone federal system." He has reiterated his belief in close relations with the US and NATO, but has warned that these re- lations will suffer unless there is an early re- sumption of US militar assistance to Tur- key. 25X1 SECRET Page 17 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 Presidents Echeverria (r) and Perez sign communique following recent meeting MEXICO: VISITING VIPs Five presidents, a Shah, a queen, a prince, a prime minister, a premier, a vice premier, and a former chancellor have made official visits re- cently to Mexico or are scheduled to do so in the next three months. This steady stream of foreign dignitaries reflects President Echeverria's campaign to enhance Mexico's prestige and standing as a leader in Latin America and the Third World. Echeverria is also eyeing a Nobel Peace Prize and, possibly, the job of UN secre- tary general after his presidential term is up in two years. Queen Elizabeth, Prince Bernhard of the Netherlands, Venezuela's President Perez. and former West German chancellor Willy Brardt have already made appearances. Making 'he rounds from March 27 to April 4 was China's Vice Premier Chen Yung-kuei, the highest rank- ing Chinese official to visit a Western country since the end of the Cultural Revolution in 1966. The vice premier toured the countryside, comparing notes with Mexican agrarian officials. Coming attractions are presidents Ceausescu of Romania, Tito of Yugoslavia, Nyerere of Tan- zania, and Senghor of Senegal. Also on the schedule are Sweden's Premier Palme and Prime Minister Manley of Jamaica. The Shah of Iran is scheduled to arrive on May 11 for a six-day stay. Except for the African heads of state and the Shah, the guests are returning visits made by Echeverria during the past couple of years, but scheduling them in such rapid order shows that the Mexican leader is energetically seeking to put Mexico-and himself-in the limelight. Despite the fact that both Perez and Echeverria are making an obvious grab for leadership in the hemisphere, the Venezuelan's visit went quite smoothly. The two presidents agreed to create the Latin American Economic System, an ornan- ization that will exclude the US, later this year. As they have with all visitors to date, Mex i- can officials will attempt to win support for Echeverria's brainchild, the Charter of Eco- nomic Rights and Duties of States, which the President feels puts him in the running for the peace prize. The attempt to sell the charter was not notably successful with Willy Brandt, who praised it for its "guiding principles," but judged that it required refinements to meet the Page 18 WEEKLY SUMMARY Apr 4, 75 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15 : CIA-RDP86T00608R000300020015-2 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020015-2 SECRET When the Shah arrives, the Mexicans are likely to stress the opportunities for investing in Mexico. The Shah, for his part, may try to interest Mexico in joining OPEC. Mexico is cur- rently not anxious to become a member because it enjoys the high OPEC-set oil prices but is not subject to US trade restrictions on the organiza- tion's members. In addition to the visiting VIPs, Mexico is pushing to play host to more and more inter- national conferences as well as for positions in international organizations. For e