ECONOMIC INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500140022-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 9, 2016
• Document Release Date: March 19, 1999
• Sequence Number: 22
• Publication Date: June 4, 1975
• Content Type: REPORT

=~ iw ~ ~
~~.
n~t;l l i~ence
~,
00/9/'14,;: CIA-I~DP$6T~l0608Ft00050014002`
of
~~
Weekly ~ 4 Jun` 75 ~ `~ ~ ~~R ~ IVY f 7`5 22
.~ ~ _ _
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Sew,re~
No 1'orcii;n Ui.S'S'LYN
Economic Intelligence Weekly
Secret
ER EIW 75-22
4 June 1975
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NATIONAL SECURITY INF~~RlyIATIC~N
UnautFiorized flisclosurl Subject to Criminf~l Sanctions
Clotil(led by OlS~ly
Exempt from pannral declai~ification schedule
of E.O. 11652, exemption ccfepory:
? SBI1jj, 12), and (3)
AWOmoticaliY dedaulfied ont
Dals Impoarbl? to Determino
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,~'n Fnn'il~u lJisv~rn
ECONOMIC INTL=LLIGENCE WEE.I;e
wage increases. By late May, the guver:unent had intcrvenrd some 1 ~'(1 near-
bankrupt companies to keep them from going under. Lisbon also usec~ tilt intcr-
venUon tactic to lake control of tLe largest conglc n~erate, which was not yet
hard pressed.
ht its third round of ;)fficial nationalizations, Lisbon took over the c~~ntent,
tobacco, and cellulose industries last month. 'f'he government reportedly now
controls two-thirds of industry, in large part because the banks and insurance
coutp;utirs nationalized in March held large interests in many firms. "hextile,
woodworking, and Bork-processing plants cu-e the must important industrial facilities
still in 1)rivate han(is. Little is known about how fast Lisbon is carrying out its
Man to expropriate agricultural holdints in excess e,f slated limits and to organize
them into cooperativrs.
The economic slide will not be halted until Lisbon gains ef~fertive conh~ol
over the many enterprises it has wrested from private h.mds. No program for
managing the nationalized srctor has emerged su far. and ':he tusk is brcoming
more difficult all the time because of the exodus of trained manpower. If private
enterprise is to playa role in recovery, Lisbon will have to det'`?te clearly the
limits of it nationalization program, curtail h~u~assnx?nt by labor, and adopt
reasonable regulatory measures. Su I~ar, A(~M leaders have spoken in grandiose terms
of a h~ansitic~n to socialism and promised th~~t "rules of the game" wiil he published
shortly.
l3~?~?ause of these unsrttled conditions, C.NP alnx)st certainly will decline in
19~~. [~+ employment is likely to reach 10',x- as nlorc soldiers return Il~um nfrica
and .jobs ,'u: foreign workers in the European C'unununity remain scarce.
1=r.rign reserves, reportedly bolstered by a gold-secured standby loan, will
resunte their decline despite new tariffs of up t:) 30',-; on c~)nsunxr d~n;lbles.
1)enuutci for imported consun)er goods is mirroring the rise in incomes, while
receipts from exports, worker remittances, to,u~ism, and foreign investment are
dropping. Capital flight appears to hr substantial. Reserves rrpurtedly 1'cll to 51.8
billion last month, compared with 5?.8 billion in early 1974, before the military
coup. (Confidential)^
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SOUTH VIETNAM: GRADUAL ECONOMIC TRANSFORMATION
"1'he new ~*ovcrnntent has shown nstrainl thus far in hushing tt,~~ South
Vietnantesr. ccononty toward complete stair ownership an.1 control. Saigon needs
time to work out its progrnn and probably is awaiting a nuasure of economic
recovery. n go-slow policy also may be hruntpted by a tlcsire to atU'act Wester-r
aid.
Private Activity Survives - in Plares
Private economic activity still is widespread despite the order of 1 May
nationalizing all productive resourc.rs. The ,~overnnxnt has started to nxtvr refuLecs,
i~ornur soldiers, and civil scrv,utts into the countryside to raisr Food nT~oductian,
without taking steps as yet to collectivize agrirulhrrr. Officials have recently stated
that private firms have a role to play in reviving industry, rrhortedly operating
at only ?5'i~ of capacity in the first weeks following the ('onununist takeover.
I~aetories abandoned by forntcr owners have in many c,rses been taken over by
workers, pending instructions from Sai,.*on.
Some of the private firms that apparently arc hein,._* allowed to continue
operations arc foreign owned. Par exanthl., companies barfly owned by .lahanese
have. resumed assembly of radios, fans, and othrr electrical ahhlianccs, hart the
operating arrangements arc not }:Hawn.
'fhe private marketplace is still the huh of activity. Recent increases in food
prices show that the rrgimc has not yet suecesstlrlly fixed prices for all sellers.
Both privatr merchants and the government apparently arc slow in moving rice
to urban markets: as a result. local shortages arc developing and prices arc rising
in spite of ample countrywide stocks. Merchants arc reluctant to engage in normal
trade as long as the value of money is uncertain, anti officials may he using sttartages
to encourage urban residents to migrate to tltr countryside. Businessmen arc
increasingly wary of accepting payment in piasters, still the ol?ficial medium of
exchange, which may he dehnciated or rendered invalid when the authorities reopen
the banks.
Saigon has announced that, for tlrc hrrsent, most ~~overnment and privatr
workers m!rst be paid at their forntcr rates. In time, the rrginte is expected to
lower the overall wage structure and considera',~ly narrow the range in wages.
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Saigon's current economic policy rctlrcts short-term pragmatism far more than
idr~~logy. Revival of production, cuatior. of jubs. and rrestablrshmrnt of social
order prrsunulbly arr. inu>rdiate goals of high priority. The Flanoi leadership now
~uicling policy in the south perhaps is .rlso motivated by an intrust in expanding
economic relations with the non-Communist world, including the United States.
Shipments to the new regime have been limited thus far to petroleum from the
USSR, sugar from Cuba, and unspecified commodity aid from China. Tl:r only
major publicirrd aid agreement is a Soviet ronunitmrn' to supply unknown amounts
of petroleum, f?ertilizrr, vehicles, medicines, food, fabrics, and consumer ~,uods.
Saigon has announecc! its willingness to enter into trade and aid negotiations with
non-Communist countries, presunulbly to limit dependence on the USSR and China.
It also may ask 1Vestcrn companies to resume dcvrlopmrnt o1? ol~fshou oil fields.
When its most inunccli?itr aims arc real red, the reginu can Le expected to
move ahead with far-reaching changes in the organisation and nru~agrmrnt of the
economy. (C'onfidrntial)?
In the negotiations fora new live-year tin agreement now taking place in
Geneva, producing nations again arc seeking means to buoy prices and export
earnings. Under the current international agreement, which ends on 30 .lung 197(,,
priers soared clueing the 1973-74 eOmI110Cllty bOOm and remain high in spilt of a
downturn since mid-1974.
At the Geneva meeting, producers arc calling 1~or
? a doubling of the limit on buffer stocks to 40,000 tons, or thus months
of world production:
? contributions 1?rom tin-consuming nations and the IMF or World Bank to
help finance buffer stocks;
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o another substantial boost in the floor price of tin; and
o new signatories to the agreement, notably Brazil, C'ltina, ~utd the United
States.
fhe proposal that con- London Metal Exchange Tin Prices ... .
Montl,l~ Average Price
sumcrs help finance the bul~fc: Q,o r
I Crnts prr pound
stock could bring a confronta-
tion with developed countries.
noo -
France anc! the Netherl,u-,.ls,
the only industrial countries
now contributing, favor the 3~0
proposal: West Germany and
Japan arc opposed; the Unitcd
Kingdom is undecided. Most
1',C countries and Japan arc
concerned about setting a ~~0
precedent for finan'~ing buffer
stocks of other commodities, zou
such as copper.
Tin is the only metal for
b1'111C11 n11ItImUI11 alld I11a~llllllll]
priers arc established icy intrr-
nation?~ agreement. Producers
and consumers participate
equally in the decisions of the
International Tin Council on
prices, buffer stock operations,
and csport quotas. In recent
years the arrangement has not
l,rcvcnted cnorrtous incrrascs
in the rnarkct price of tin, since
buffer stocks have trot been
adequate to fill the gap bc-
twcen supply and demand.
Bcanlse the recession in
industrial countries has rc-
duced the price of tin on the
London Metal lxchangc to
X3.1 ? a pound-25'%. below the
1'in Mine Production and Refined
Consumption by Country, 1974 ....
17"6
Thailand
Auslra6a
untlnd s,au~s I 3og,
Ilnded Kinlidnm
West Germany
franr.n
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375
350
DI I I I I I I I I I I I I I I I I I I I I
1956 57 58 59 6D 61 62 63 64 65 66 67 66 69 7D 71 72 73 74 75
scr,oeo c~,
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Frcc World: Tin Production :nrd Constnnption
Ic)74 hrak I,ru~lurrrs will l,(~sh har(I f'ur arran~~mrr.ts that wuulcl at I~~;at maintain
rurrrnt hrir~~s. i\n 15'; rut hark in rslwrts (Irrr~~r(I l,v thr ('uunril in ~~l,r-il an(I
substantial lun~rhasrs fur huf'frr storks havr nut r,u~tailr(I thr l~rir~~ sli(1~~. "hhr hi~~h
Irvrl ul' tin storks in ~c,nsun~in~~ rc~w~trirs thrralrns tc~ (l~?hr~~ss hricrs I'I(rthcr unlrs~
lll`nlanll rrl'JVl'i'S Suun.
In lnlshin;~ fur a hi~~ltrr Iluur l,rirr, l..l)(' tin l,ru(iur~~rs wall hnint to th~? 5'';
clrrlir.r in I~rrr VI'(,rl(I mint l,ru(Ittrtiun (Itn~in~~ 1(t7 ti-7~}. llranwhilr, cunsun~l,tic~n
;~rrw by 7'';, with salts I'rum ihr US sturkhi':~ an(I I'I~(' hul'f'~?r sturl:s hrll,in~z to ruv:~r
thr ,rah. /~ chart, risr in l,ru(luctiun rusts runtinu,s to slow invrsUn~~nt in nr~~- mines.
C'usts in 11a1a~'sia. which account fur two-fifths ul' wurl(1 hru~lurtiun. juntl,~~(1 h~~
S(1';% in 1974 alunr. nc;rur(lin~~ to a rrrrnt It\11~ stu(iy. 13ulivian minin;~ rusts art close
lu lhr hrrak-rv~?n huint. I('unl'iclrntiall^
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Waning Soviet Interest in US Widc-Bodied Aircraft
After more than three years of intermittent talks with ,'~ocing, Lockheed, and
McDonncil Douglas, Soviet officials have at least temporarily discontinued
negotiations for US wide-bodied aircraft. Moscow's interest in a deal cooled when
ttie United States rejected proposals for an overall aviation package. The Soviets
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had been pushing for construe!ion o1' a turnkey aircraft plant in the USSR or,
at the Ieast, a license to build aircraft with the ald Ol US iCC11nIC1anS and equipment.
Sovicl interest also has (liminishcd because of cost overruns in several donustic
aircraft programs :md profitability problems i'or Acrol7ot. (Confidential Nu horc;gn
Disscm)
Moscow Rejects Offer of US Short-Tenn Credit
The USSR recently informed Bank of America that it is not intcrestccl ;,~
the bank's offer to arra~tgc a $500 million line of short-term credit. The Soviets
stated that they were intcrestccl only in mcdiunr and long-term credits. As a trial
balloon last I~cbruary, the president of the bank said that a consortium could be.
formed to provide ll:c IJSSIZ with a x;500 million line o1' revolving six-month credits.
Because of US limitations on bank lending to any one customer, the Soviets may
have I'clt that accep, Inc;; of short-term credit would reduce the amount of longer
term financing available at a later date. (Confidential)
Communist Aicl and Trade Activities in Less Developed Countries
oi' the Free World, April 1975
ILR RP 75-15, Niay 1975, Secret No roreign Disscm)
The monthly report for April features a review of Soviet lishing assistance
to LDC's, with emphasis oil de~~clopments over the past year al7c: a half.
('epics ul' this publication may be onlcr~J by callin}t Cudc 143. 1{xtcnsi~m 7?34. 25X1A
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ECONOMIC INDICA~'OI~S
Prepared by
The Office of economic Research
June 4, 1975
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'lltc F.currr~rnic lrrdirutrrrs pro~dicle ul~,-to-clacc infornuttion on chan~rs
in the clontestic and external economic aclivihcs of" the major non-
('onununist clcvrlopecl countries. 'I'o the rxlenl possihle, tL'c /;?r?r;nni~rir?
Lrdicaturs arc ulxlatecl I"rant prrss ticker and I~,mhassy reporting, so that
the results arc nrrclc available to the rcacicr works - or somrtintrs months -
brforr receipt of official statistical publications.
Comments anc! queries rrgarcling the lirurro~rric? /rrrlic?alurs are
welcomed. "I'hry may hr clirrctrcl to cif" Ihr Office cif
Iconontic Research, ('oclr 143, I?xtrnsio-' 740' or 351-710'.
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 INDUS r F~I~pr~'N/~E~4~1~e~~~OQO/49A14 t~LCISAPrRDP86T00608R000500140022-9
COPPER
WIRE ?AR
!~ Exrhangel
MIY
LME us
'1 Jun 55.5 f'7 G
27 Mny 57.!, 1; 1 G
Apr 75 G02 (IJ.I; 15
May 74 130,4 hD i{
LNiE U5 3011
z Jun 3z.9 :111'
27 May 33.0 .;,.'.
Apr 75 35.4 II
May 74 Inl.c :LI II
28 May
Z7 May
Apr 75
lIS
7'1 };
Ilu ;
1) 5 1
Jllly 1972 1973 t 97n 1975
I Appnl~innh:s wnrld market pnr,r. Irequcn;ly rased by nugm world pnnlncers ,Intl traders.
ahhnugh truly snedl quanttlms nl 1hr.:a: metals arr, aelually nddrd nn the I ME
STEEL SCRAP
~ TIN
U5'~/r_
~~,~
~d" LPIE
~~.~'~
u ,~?~
I'
'j~ ~ . ~ ,., ~ ,
,s '
v 3, El
150 '
July 1972 1973
` ?~ 15!i.U
PJlajor Produrer (MP) ,,"~~'~
MAY
1974 1915
C Per Paurld SELECTED MATERIA
LM[ IIS
2 Jun 15A 7 II
27 May IOA ,. ,
Apr 7Ci 21.G , .
May 74 30.3
LASE U.
2 Jun 311.0 ,
Z1 May 31;10 .a
n;tr 75 .~~ , z . I
May 74 4'12.1 1!,I;'~
LIS Uealcr A~ Y ~~
(05111 `~ `~ MP lltill
2 Jun 1!i!i.0 I4" II
27 May 155 0 1 ?;:' y
Apr 75 161 1 ida''
May 74 1900 Milli;
Alumunnn L1,gw113 f',ud clh
Steel Cunginsde. SlT
burl Nru Nnu llr~ru?nu?r OIA IIao9t,
Chrome Ole 1lussi,rn ~ G1I
Chruum Iln :; Aln,,, S 11
Eernlr.hnnnc II; I;han;r clh
Nrrkel h1,gwll!.I'unl C.nhntlr$dh
r,4;inganescfhc Off A1.. S4I
lunysten Urc !;!, 1NI7-~ ~^;1
Merr.ury NY S lflh r i,r-,r
Silver Ih1I I,r,h cLn~ p;
~- ;;,1 ~ )
r: ~~, u,lluic
111 ~-
July 1972
300
INDUSTRIAL
MATERIALS
25n
INDEX
200
'
1
.i0
100
July 1972 1973 1974
1 PrIIIIIICL'r5~ IIIIf,C. CJVBrS 11111x1 prlmaly IneI;t15 511111 In II?~ ?11,11:,, 81a1es ~ ~ CPYRGHT
1 Uununl nn New Ymk nrukcl '1 Cnnqur.;nr. pnce Inr flmanpl. Phllndelplua. and Pilishurtlh
~~ S type styrene, US I aA~~r~~~ved For Release 2000/b18/14:CIA-RDP86T00608R000500140022-9
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LS PRICES Monthly Average Cash Price
LME US
2 Jdu 55.5 li;i (i
27 May 57.9 6aG
Apr ]5 6U.2 f:{.Il
!day 74 130.4 !;0't
TIN
2Jun
LME
32.9
US auu
1"!~
27 Mav
33-0
3h r~ ?50
~~
~
Apr 75
35 ~
,ail 0
US'
~~
"''~
May 74
GU.G
is ;' 20U
,~?
~
~
rnEl
~_
MA1~
LME us
2 Jun 15.4
27 May IG.4
Apr 75 21.fi ~ .
May 74
~M~ us
2Jun 312.0 :.. , .
27 May 313.9
Apr 75 323 2 ~ I
May 74 42! 1 t;, I, .,
~ ---
SELECTED MATERIALS
A;umunun rd,llm 11!; i4wl clli
sump r,~~~~~,~~~,a~~. s u
Iron Un; Bon Ge:.cnmr Illil Ilauqu $1i
Cluunw Orr. Ilu~.~,i,ul 5 MI
fhnnnc [he ti nh~~,~ S It
fr.nnr.hnunn Ilti I; h,ugu. cl6
Nu:kcl Malin llti Vnul CanmAr S Ih
hlanganesr Um aH ~ L1n S ll
Iungstnn Drc f!.' lNll,i. SSi
Mercury NY. S J6'6ILISV
SIIVnr thlf ra?ai. cLnp Or
L~
1GlllllJi '15494] 21554
459'1'1 i 4G7 U1 ~ 3GU 29
rl,ti z Jun 29.z r, r,
27 May 29.2 "J 1.
Apr 75 29.2 :'f{!i
May 74 43.8 %E S
MAY
CPYRGHT
28 May
27 May
Apr 75
hiay 74
115
/!1 H
'r10 1
H5J
O G f,
1975
by mnlnr world pnnlur.nrs and Traders.
Synthelir,'
ASR)
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INDUSTRIAL
MATERIALS
- INDEX
is~o = ioo
n. ~ s rJ
CPYRGH
Tlus is a compiled iade><
by the Economist for 19
raw materials which
enter mtnrnatianal trade.
Cnnunodilins are
wmghtnd by 3-year moving
avcrapos n( nnparls into
mdustrialind cotndnes.
 AGRICUL~~~~v~~~FC~rBRM vela se x2000/09/14 :CIA-RDP86T00608R000500140022-9
o I I I I MIY
July 1972 1973 1974 1975
WHEAT
f~ansas City No. ;: H~ayrrl Winter
1
gf 6,
t~:~ 7`~
t
a
~ ~
~ ~~~
,;
SOYE3EANS
Chicago No. 1 Yellow
1 I MAY
I
5
$ Per Bushel ~ CORD
2 Jun 3.16
27 May 3.26
App 75 3.66
May 14 3.58
2 Jun 4.93
27 May 4.99
Apr 75 5.76
May 74 5.42
L Chicago No. 2 Yellow
o I I ~ I MtY J
Z5
0 ~ I I I MIY
July ? 972 1913 1974 1975
SUGAR
World Raw New York No. 11
COFFEE
Other Milds
1 Jun U.4295
t 2 Jun 50.00
A
27 Ma
D
424D
f
y
.
21 May 50.75
Apr 75 0.4237 55
~
Apr 75 48
48
May 74 0.5880
~
.
May 74 71.16
50 l~
July 1972 1973
2 Jun 2.65
21 May 2.79
Apr 75 2.99
May 74 2.70
2 Jun
14.15
~,
27 May
17.00
Apr 75
24.06
May 74
23.60
0
12 5 ~--
COCOA
Ghanaian
_~
L RICE
No. 2 medium grain. 4966roM
Jg J9J7 J 75 ~
CPYRGHT
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4aEa7 Mondliy Average Cash Price
CORN S Per Bushel
L Chieago No. 7 Yellow
N l I I I MIy
July 1972 1973 1974 ~ 975
SIr`GAR
World Raw New York Nc. 11
0 l I I I M~ Y
July 1972 1973 1974 1975
2 Jun 2.85
21 May 2.19
Apr 75 2.99
May 14 2.10
2 Jun 14.75
21 May 17.00
Apr 75 24,06
May 74 23.00
CPYRGHT
2 Jun 0.4295
27 May 0.4240
Apr 75 0.4237
May 74 0.5800
2 Jon 50.00
27 May 50.75
Apr 75 46.40
May 74 71.10
RICE
No. 2 medium grain, 4%brokens
1-__1
1 27 MAY ~
MAY
~_
1975
$ Per cwt.
f.o.b. mills, Rous!on, Tex.
21 May 19.50
19 May 19.50
Apr 75 19.50
May 74 28.00
2 Jun 02.00
27 May 03.50
Apr 75 12.92
May 74 109.70
1970 =100
CPYRGH
Tha rs a compiled index
by the Economist for 10
lood commudiucs which
enter internaticnal trade
Commodities are
weighted by 3 year moving
averages of imports nnu
inAustriaLred cnuntnes,
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