WEEKLY REPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080034-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 24
• Document Creation Date: December 27, 2016
• Document Release Date: May 11, 2010
• Sequence Number: 34
• Publication Date: July 25, 1975
• Content Type: REPORT

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Weekly Review
Top Secret
Top Secret
July 25, 1975
Copy
N2 661
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The WEEKLY REVIEW, Issued ev3ry Friday morning by the
Office of Current Intelligence, reports and analyzes significant
developments of the week ttirough noon on Thursday. It fre-
quently includes material 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
therefore published separately as Special Reports acre listed
in the contents.
CONTENTS (July 25, 1975)
MIDDLE EAST
AFRICA
India: Parliamentary Approval
4 Angola: New Cease-fire; Soviets
7 Portugal: Goncalves at Issue
8 Italy: Fanfani Falls
9 Spain: New Political Groups
10 CSCE: On to the Summit
10 EC: Leaders Meet
12 MBFR: Dead!ock Continues
13 Multilateral Trade Negotiations
WESTERN
HEMISPHERE
14 Argentina: More Cabinet Changes
14 Cuba Focuses on the Caribbean
16 Ecuador: Payments Problems
17 Peru: Strikes in Arequipa
17 Brazil: Liberalization Attacked
18 Panama: Options on the Canal
EAST ASIA
PACIFIC
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19 Laos: Plodding Forward
20 South Korea: Naval Improvements
Comments and queries on the contents of this
publication are welcome. They may be
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EGYPT-USSR: BREATHING SPELL
The Soviets are probably breathing a little
easier after Egyptian President Sadat failed to
announce new steps against the USSR in his
speech of July 22, but they almost certainly
anticipate more troubles.
Prior to the speech, Soviet concerns
centered on three possibilities:
? Restrictions on Soviet naval use of
Egyptian ports would be increased.
? The remaining Soviet military advisers
would be expelled.
? Sadat would abrogate the Soviet-
Egyptian treaty.
A major Pravda article on July 15 summed
up the defense of Soviet policy toward Egypt
and indirectly accused Sadat of undermining
Soviet-Egyptian relations.
In an attempt to head off any further
moves by Cairo, the Soviets early last week
implied they might be more flexible on
Egyptian debt payments. Sadat has been
demanding that the USSR postpc:ie payments
due in 1975 on Cairo's military debt, which is at
least $1.5 million. The Egyptian finance min-
ister arrived in Moscow on July 22 to discuss the
question: according to the Egyptians, he went at
the invitation of Moscow.
Moscow may also be using its new proposal
on the Abu Tartur phosphates project to placate
Sadat. The Soviets had refused to provide
financing for the port development and railroad
construction necessary to develop the deposits,
but are now saying they are willing to lend over
$500 million at commercial terms.
The outcome of the finance minister's visit
will provide one clue as to how far the Soviets
are prepared to go in order to prevent a further
erosion of relations with Cairo. Some conces-
sions on economic issues may be in order, but
the Soviets are so dissatisfied with Sadat's for-
eign and domestic policies that they are unlikely
to consider major conciliatory moves such as
resumption of substantial shipments of arms.
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INDIA: PARLIAMENTARY APPROVAL
Parliament reconvened this week and the
large Congress Party majorities in both houses
overwhelmingly approved the month-old state
of emergency amid new signs that Prime Minis-
ter Gandhi does not intend to allow India's
political system to become again as free as it was
before her crackdown. The government has
taken additional steps to tighten its control over
foreign correspondents and to discourage de-
fiance of the recent authoritarian move.
The parliamentary session-expected to last
one to two weeks-is limited to transaction of
government business. The agenda includes bills
that would approve recent executive ordinances
that have curbed civil liberties, granted the gov-
ernment powers to confiscate the property of
persons evading arrest, and precluded resort to
the courts to challenge the state of emergency.
In her parliamentary presentation, Gandhi re-
fused to speculate on how long the emergency
would remain in force. She stated bluntly, how-
ever, that under no circumstances would there
be a "return to the pre-emergency days of total
license and political permissiveness."
Opposition members-with the exception
of key leaders who were jailed last month-
attended the session only long enough to vote
against the emergency and to denounce
Gandhi's authoritarian moves, including the sus-
pension of parliament's normal rules of pro-
cedure.
There are rumors that Gandhi may ask
parliam. A for constitutional amendments that
would institutionalize some of the emergency
powers she now exercises temporarily. Such a
move may be foreshadowed in statements by
Indian officials who claim the British parlia-
mentary system has not worked well for India.
A frequently mentioned alternative is a strcng
presidential system like France's.
On July 21, the government imposed new
censorship rules that could result in the expul-
sion of most foreign journalists. While the cen-
soring of news before it is transmitted from the
country has been dropped, the government now
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requires journalists to sign a pledge that they
will abide by extremely restrictive press "guide-
lines." Forbidden subjects include opposition
activities, references to the 6,000-10,000 pris-
oners jailed in the past month, and anything
that falls within the range of "unauthorized,
irresponsible, or demoralizing news items, re-
ports, conjectures, or rumors." There are some
50 foreign reporters in India; four, including
two Americans, have already been expelled.
Public opposition to the emergency pro-
visions has been slight. In some areas, under-
ground presses are beginning to publish papers
and handouts, but with little apparent impact.
Various opposition parties reportedly are plan-
ning anti-government demonstrations, and there
is the possibility of occasionL.l sabotage and
other acts of violence. Governments in the states
where political opposition is strongest-Gujarat,
Bihar, and Tamil Nadu-appear to be avoiding
direct confrontations with New Delhi that might
give the center a pretext for imposing "Presi-
dent's rule"-direct control from New Delhi-
over those states.
School officials have been ordered to pre-
vent anti-government activities by students re-
turning from summer vacation. In some univer-
sities, student elections have been postponed
indefinitely. The government has also delayed,
for at least six months, the state elections in
Kerala that were due in September. The Con-
gress Party lost a state election in Gujarat in
June and would have faced a serious challenge in
Kerala.
The Supreme Court will begin hearing oral
arguments against Gandhi's appeal on August
11, but the decision may not be announced
until tall. Even if the court rules against her, it
seems increasingly likely that the Prime Minister
will insist on remaining in office. She could do
this legally by amending the election law to
change, ex post facto, either the basis for her
recent conviction for election violations in
1971, or the penalty-her rPmnyal frnn, office.
New Cease-fire
After almost two weeks of fighting in
Luanda and the couritiyside, the National Front
for the Liberation of Angola and the Popular
Movement for the Liberation of Angola agreed
this week to another cease-fire. The new agree-
ment will probably be no more effective than
earlier ones as the two groups struggle to be in
control of Angola when it gains independence
next November.
The Popular Movement now enjoys mili-
tary dominance in the capital. The Front has
only several hundred troops barricaded in an
industrial complex just north of the city. Under
the terms of the cease-fire, these troops will be
allowed to remain there.
The National Front apparently has not
abandoned the idea of fighting its way back into
the city. A relief force that moved down from
the Front's tribal stronghold in the north has
skirmished with Popular Movement troops at
Caxito, some 40 miles northeast o` Luanda.
The Portuguese made only half-hearted at-
tempts to stop the latest round of fighting, but
apparently have now decided to take a firmer
stand, ostensibly to avert further bloodshed.
The Portuguese commander in the territory has
ordered his troops to establish a defense
perimeter around Luanda to protect it if the
National Front moves in from Caxito. The Por-
tuguese action will in effect help protect the
Popular Movement's gains and convince the Na-
tional Front that the Portuguese want the Popu-
lar Movement to win.
Front Regroups
The setbacks suffered by the Front
prompted its leader, Holden Roberto, to make a
quick tour recently of its facilities in northern
Angola. His visit-his first inside Angola since
the insurgency against the Portuguese broke out
more than a decade ago-was obviously designed
to boost sagging morale. Roberto is apparently
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the near future.
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The Front's defeats in recent months have
been partly because of its inability to match the
arms and equipment being supplied to its ad-
versary by the Soviet Union. Belatedly, the
Front is now receiving some additional Chinese
and other equipment from stocks held by the
Zairian army. Peking recently authorized Zair;;
to release the equipment. So far, however, Zaire
apparently has passed on only modest quantities
of small arms and ammunition, and perhaps
;ome transport vehicles.
An Open Soviet Role
Recent substantial Soviet arms deliveries to
the Popular Movement and harsher press treat-
ment of the rival National Front indicate that
Moscow is playing a more open role in its sup-
port of the Popular Movement.
Military shipments since May have report-
edly included trucks, various armored vehicles,
artillery, grenades, machine guns, and small
arms. The Soviets are also continuing to train
substantial numbers of officers and trcvps of
the Popular Movement in the USSR and the
Congo. A few Angolans have been
sent to F;i,;t
German to be trained
Moscow and its Eas. European allies are
rumored to have made some direct arms ship-
ments to the Popular Movement in Angola, but
the Congo is the main conduit for Soviet arms.
Early this month, Popular Mnvement leader
Neto reportedly flew to Brazzaville to urge the
Congolese to speed up the flow of Soviet weap-
ons. The Congolese had apparently been slowing
down shipments because they were uneasy
about the possibility of civil war in Angola.
The Soviet press has consistently accorded
special praise to the Popular Movement, but
until recently it avoided direct attacks on the
National Front and Angola's smallest group, the
National Union for the Total Independence of
Angola. In the wake of the recent fighting in
Luanda, however, the press has charged that the
National Front is a client of China and the US,
and has labeled it a "reactionary organization"
whose members are responsible for Cie death of
hundreds of people.
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Moscow probably still has not written off
the prospect of a coalition government in An-
gola. With the Pupular Movement now having a
clear military advantage, however, the Soviets
appear to expect that the Movement will have
the dominant role following independence.
No Solution in Sight
The transitional government has virt;!ally
ceased to function. The Front has not yet an-
nounced a replacement for Johnny Eduardo
Pinnock, its chief represent?tive to the transi-
tional government, who resigned last week and
fled to Zaire. Portuguese officials apparently
hope that fighting can be averted long enough to
get at least the semblance of a transitional gov-
ernment structure functioning again. In the long
run, however, this solution i simply a return to
a formula that has already proven fn hp ~in
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Foreign Ministry alleged that it was not any
difference of opinion on Gulf security matters,
but rather certain intra-Arab problems, such as
the dispute between Kuwait and Iraq, that made
a summit inappropriate at this time. Riyadh
earlier had taken this line.
PERSIAN GULF: FAILURE AT JIDDA
The foreign ministers of the Persian Gulf
states failed to agree on new steps to strengthen
cooperation on regional security when they met
in Jidda on July 16 during the Islamic confer-
ence. The outcome was surely disappointing to
,the Shah of Iran, who has long been pushing for
an alliance of Gulf states against outside inter-
ference and local threats to the status quo.
The Shah had been encouraged by political
developments in recent months to believe the
time was ripe to resume his search.-begun in
1968-for a formula under which Iran could
play a greater peace-keeping role on the Gulf's
western shore. He believes the political systems
there archaic and susceptible to subversion.
Resulting politkal instability, he fears, could
provide an opening for interference by outside
powers in Gulf affairs.
Tehran looked to the Jidda meeting to
produce a staicinent in which the participants
would take a ccmmon position on the
desirability of limiting foreign interference in
the Gulf. The Shah had afro hoped the ministers
would take steps toward an early Gulf summit
conference on the security question. Neither
goal was realized, although the ministers did
agree to consult further.
The iranians are nevertheless portraying
the Jidda meeting in the best possible light,
claiming as progress the fact that representatives
from all Gulf states met for the first time to
discuss common problems. An official in Iran's
There are, in fact, substantial differences
among the states. Saudi Arabia was probably the
main obstacle to rapid movement toward formal
security cooperation. The smaller Gulf states
probably followed its lead. The mistrustful
Saudis do not believe there are threats sufficient
to warrant a regional security arrangement and
prefer to rely on bilateral ties. They certainly do
not share the Shah's perception of a power
vacuum on the western side of the Guff that
Iran should help fill.
Iraq reportedly supported the idea of a
formal declaration, but one restricted to
assuring freedom of navigation in the Gulf.
Baghdad does not favor the more comprehensive
a roach bein pushed the Iranians.
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PORTUGAL: GONCALVES AT ISSUE
The military regime in Lisbon is continuing
its efforts to put a government together, despite
a power struggle between moderates and radicals
in its own ranks and the open opposition of
moderate political parties. The military may try
to compromise by offering to reorganize the
government, but this would be only an
expedient and would not solve the country's
worsening problems.
the proposed reorganization would entail
restructuring the government to form an 11-man
directorate drawn from the present all-military
Revolutionary Council. The Revolutionary
Council-whose consensus rule has weakened its
decision-making capability--would be reduced
to playing a pro forma role.
Power would be further concentrated in a
three-man executive composed of President
Costa Gomes, Prime Minister Goncalves, and
security chief Otelo de Carvalho, presumably
representing the moderate, pro-Communist, and
left-nationalist factions within the council. The
executive would be assisted by two deputy
prime ministers-one military and one civilian-
to handle day-to-day administration problems.
Both nominees suggested for the two positions
are acceptable to the moderates; this may be the
quid pro quo for retaining the present prime
minister-whom the moderates want to oust-
and accepting his cabinet nominees.
Such an arrangement might settle surface
differences within the military, but the lull
would be temporary at best. The moderates are
unhappy about Goncalves' pro-Communist
policies and have been trying to bring about his
ouster by frustrating his efforts to form a new
cabinet. They have been counting on the back-
ing of a majority of the Revolutionary Council
in a vote, but the continuing stalemate and the
delay caused by Goncalves' difficulty in forming
a new cabinet may lead to an erosion of the'
moderates' support. Many officers would prob-
ably favor putting a quick end to the present
uncertainty by revamping the governmental
structure.
The 240-member Armed Forces General
Assembly on July 25 will consider the reorgan-
ization and possibly other proposals to restruc-
ture the government-some perhaps designed to
alter the balance of power-but Goncalves'
chances for political survival appear strong. An
attempt by moderates in the assembly to oust
Goncalves at this late date may well end in
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The moderate political parties are unlikely
to be pleased with the proposed reorganization.
The Socialists, in particular, buoyed by the
massive turnouts at party rallies in Lisbon and
Oporto over the weekend, will be confronted by
the need to resipond decisively if it appears that
the propcsed reorganization means that
Goncalves will remain in office. The Socialists
used the rallies to protest the Armed Forces
Movement's new policy of establishing "direct
links" between the military and the people and
bypassing political parties. They also con-
centrated on criticism of the prime minister in
an effort to encourage mod( ates in the military
to reverse the government's continuing trend to
the left.
The Communists, on the other hand, will
welcome any solution that retains Goncalves-
the Communists' key to power-in the govern-
ment. They responded to the Socialist demon-
strations by taking advantage of their dominant
position in the mass media to publicize support
for Goncalves, while playing down the Social-
ists' success in organizing massive popular dem-
onstrations of strength. The Communist-dom-
inated propaganda division of the armed forces
general staff has also expressed its support for
the prime minister and his attempt to form a
new government.
The Communists are concerned, however,
about the wave of violence directed at their
offices and property in northern Portugal. Never
popular in the conservative north, the Commu.?
nists have been tolerated until recently, but
incidents of attacks on party offices by angry
citizens are increasing daily. Although no single
liti
l
po
ca
group has claimed credit for organizing
the attacks, they are becoming too numerous to
be dismissed as random outbreaks of anfi.rnm.
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ITALY: FANFANI FALLS
. Amintore Fanfani was forced out of Italy's
.most powerful. political position-secretary of
.the Christian, Democratic Party-when he lost a
vote of confidence at the party's national coun-
cil.meeting this week. Fanfani's ouster amounts
to a first step by the Christian Democrats to-
ward changing their conservative image and
-improving relations with the Socialist Party.
Fanfani's power base came apart quickly in
the five weeks between the council meeting and
the regional and local elections last month. By
late last week, center and leftist factions repre-
senting about 70 percent of the party had re-
signiA from Fanfani's executive directorate.
Prime, Minister Moro and his faction did not go
that far, -but Moro kept his distance from Fan-
fani by proposing a temporary "collegial" lead-
ership to guide the party until its congress in the
fall.
Despite his isolation, Fanfani resisted pres-
sure to resign until close to 60 percent of those
attending this week's meeting voted not to
accept his report to the council. In his report,
De Martino(c) with other Socialist leaders
Fanfani' blamed Christian Democratic losses on
long-term political trends rather than his
policies.
The Christian Democrats are still discussing
how to replace Fanfani. If they rule out IJloro's
plan, Fanfani's successor will almost certainly be
a moderate who has reached an accommodation
with the Christian Democratic left-wing. The
left has consistently opposed Fanfani's policies.
Attention will now shift to the Socialists,
whose central committee is currently evaluating
the results of the Christian Democratic meeting.
By ousting Fanfani, the Christian Democrats
have met one of the conditions recently listed
by Socialist chief De Martino for his party's
return to full participation in another center-left
coalition, still the only workable alternative to
Communist participation at the national level.
The Socialists are now limiting their role to
"case by case" parliamentary support for Moro's
cabinet of Christian Democrats and Re-
publicans.
In addition, the Socialists want program-
matic concessions from the Christian Democrats
that would give any new government a more
leftist cast. Even those Christian Democrats in-
clined to move in that direction, however, will
have trouble with De Martino's idea of bringing
the Communists directly into the government's
policy-making process. De Martino, although
ruling out government posts for the Communists
in an interview last week, called for formalized
consultations with them on the government's
program. De Martino said he could not see how
his party could agree to participate in a govern-
ment that leaves the Communists in opposition.
The Socialists evidently believe their party
will suffer electorally if it remains associated
exclusively with the Christian Democrats. At the
same time, the Socialists fear they would be
dominated politically in any partnership with
the stronger and better-organized Communists.
De Martino's idea of getting all three parties
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committed to the same program is an attempt to
solve both problems.
The Communists are still preoccupied with
consolidating their gains at the regional and
local levels, but they regard Fanfani's fall as a
victory. The Communist electoral campaign was
a highly personalized one and directed against
Fanfani, whose political line was more explicitly
anti-communist than most other Christian
Democratic leaders. Fanfani's nomination of the
Christian Democrats was seen by Communist
chief Berlinguer as a major obstacle to his "his-
toric compromise" strategy, aimed at an even-
tual rapprochement between the two parties.
SPAIN: NEW POLITICAL GROUPS
Prime Minister Arias' plan to permit con-
trolled political associations is being undermined
by opposition groups who are forming their own
organizations without the regime's sanction.
Last month, 16 center-left opposition par-
ties formed an alliance known as the Democratic
Convergence. The organization is reportedly
unwilling to apply for legal status, apparently
out of concern that to do so might tarnish its
opposition image.
N
The Democratic Convergence has the po-
tential to become a major political force if the
various parties within the alliance maintain their
cohesiveness and if partisan activity is permitted
in the post-Franco era. It will serve as a counter-
weight to the Communist-dominated Demo-
cratic Junta formed in Paris last year. The new
organization made its first public move last
week when it issued a manifesto calling for the
"re-establishment of popular sovereignty
through an essential break with the regime and
the beginning of a constitutional period."
Earlier this month a group of moderates-
most of whom had been associated with the
Franco regime at one time or another-formally
constituted a political action group under the
guise of a research corporation. By organizing as
a research corporation instead of appiying for
status as a political association, the founders--
whose political credentials are impressive-have
signaied their disapproval of the limitations on
associations while maintaining a political voice
through their new organization.
The founders of the new corporation, to be
known as the Independent Studies Federation-
FEDISA-stated that its purpose is to study
political, social, and economic problems con-
fronting Spain. While admitting that they sub-
scribe to different political ideologies, all the
members believe that public liberties and co?n-
mitment to a democratic system are essential.
FEDISA should become an important pres-
sure group. The most prominent member is
Manuel Fraga Iribarne, currently ambassador to
London, who earlier this year decided not to
form a political association after the government
failed to provide sufficient guarantees of free-
dom of action. A number of other members still
occupy official positions, and many have oc-
cupied important government posts.
The Franco government reportedly is
angered over the organization of FEDISA out-
side the framework of the political associations.
The newly appointed minister of the National
Movement called the device of incorporation "a
fraud against the nation."
General Franco himself criticized dis1 dent
political groups in widely publicized remarks
last week to a conservative organization of Civil
War veterans. His reference to the dissident
groups as "dogs who bark" seems certain to
hinder further Arias' efforts to encourage appli-
cations for political association status. In the
period since last January, when the statute for
political associations took effect, only five, pre-
dominantly rightist, political associations have
been approved by the government.
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Negotiators at the European security con-
ference reached agreement on military-related
confidence-building measures -rid several other
issues last weekend follov ing the longest
negotiating s'ssion in the histo-,- of the confer-
ence. The acjreements clearec' the way for
acceptance o' July 30 as the opening date for a
three-day summit in Helsinki.
Agreement on confidence-building meas-
ure; was made possible when Turkey, under
increasing pressure from its NATO Allies,
dropped most of its demands. Compromises
were worked out that give Turkey partial
exemption from notification of maneuvers along
its southern and eastern borders. Turkish con-
cerns were also recognized by the inclusion of a
provision for separate notification of
amphibious and airborne maneuvers.
Th.- Soviets held out until the last hour for
a mention of the "irreversibility of detente" in
the final declaration, but agreed finally on a
slightly less pointed formulation. The Soviets
also tacitly agreed to allow Italian Prime Min-
ister Moro to sign the final declaration twice-
acting on behalf of the EC as well as Italy.
Attention has now shifted to Helsinki,
where 35 heads of government meet next week
to sign the declaration adopted by the confer-
ence. Each speaker is supposed to limit himself
to 20 minutes. In an order determined by !ot,
British Prime Minister Wilson will be the first to
address the conference; General Secretary
Brezhnev will be thirteenth, and President Ford
is twenty-sixth.
West European leaders are generally on the
defensive as the Helsinki summit approaches.
They hope to counter initial public skepticism
by focusing in Helsinki on the more positive
aspects of the agreement, stressing the potential
for expanded human contacts and increased
cooperation with the East. The UK, France, and
the CIS will elso make coordinated statements
noting the applicability of the conference
documents to Berlin.
The Western allies now believe that Mos-
cow may follow up the CSCE with renewed
emphasis on disarmament negotiations, possibly
including a new push for a world disarmament
conference. A high-ranking French Foreign
Ministry official said his government also
expects Moscow to begin a drive to broaden the
scope of the force reductions talks in Vienna to
The meeting in Brusseis on July 16-17 of
the European Council fulfilled the aim of the
nine EC leaders to conduct an informal ex-
change of views on major issues without giving
rise to public anticipation of dramatic decisions.
Ilie largely unstructured format was not
without its limitations, despite the keen satisfac-
tion expressed by French President Giscard and
German Chancellor Schmidt. The perennial
complaint of the "Small Six" EC countries that
the "Bid Three" dominate such proceedings was
implicitly reflected in comments to the US
embassy by a Dutch foreign office official. The
Hague was also exasperated by what it regards as
the lack of focus to the discussions, which the
Dutch blame on inadequate staft preparations.
EC Commissioner Soames has privately
admitted that the Council was confused and had
made only limited pro,ress, but he attributed
this largely to a poor performance by the chair-
man, Italian Prime Minister Moro.
Economic issues relating to the v'iorld-wide
recession dominated the talks. As expected, no
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major common policies were agreed upon,
although the discussions probably helped clear
the way for eventual decisions.
A consensus was reached that all members,
except Britain, Italy, and Ireland, would
implement further reflationary measures, par-
ticularly increased public spending, early this
fall. This topic headed the agenda of the Wilson-
Schmidt and the Schmidt-Giscard meetings in
Germany on July 24 and 25-26 respectively. As
a result, Schmidt is expected to express a Com-
munity viewpoint when he urges President Ford
to pursue a similar policy when they meet in
Bonn on July 26.
It was agreed that Paris-which reported
Washington's agreement-would take steps to
call a second preparatory conference of oil
producers and consumers early this fall. If all
goes well, and the differences which led to the
breakdown of the first meeting are resolved, the
full conference would be scheduled for late
November or early December.
Giscard did not ask the other EC members
to support his proposal for an economic and
monetary summit of the US, the UK, France,
West Germany, and Japan. The nine reportedly
were in full agreement that consultations with
the US and Japan were necessary, but the
timing, level, and modalities were not discussed
in detail. Moreover, some of the smaller mem-
bers are insisting that the Community as an
entity should be represented to ensure that their
interests are protected. Official sources in Bonn
understand that an agenda would focus prirna-
rily on coordination of demand management
policies designed to restore economic growth,
and that a discussion of international monetary
questions-and the French effort to restore a
fixed exchange rate system-would be sec-
ondary.
Discussion on raw material policy, and on
an EC strategy for this fall's special session of
the UN General Assembly, apparently facilitated
the compromise reflected in an agreement
reached at this week's foreign ministers council.
At the ministerial, the Nine agreed on broad
guidelines which will serve as the basis of the EC
presentation at the UN meeting. The paper
represents a balance between those in the
Community-notably France-who wanted to
emphasize commodity agreements and those
who preferred a policy aimed at stabilizing the
export earnings of developing countries.
Developments in Portugal and the outlook
for a large loan to the Lisbon government were
carefully scrutinized. It was agreed that aid to
Lisbon-French objections notwithstanding-
would be contingent upon evidence that it
intends to adopt a democratic form of govern-
ment. Portuguese Foreign Minister Antunes,
however, decided at the last moment not to
keep his appointment with the EC foreign min-
isters.
The Council issued a declaration on the UN
which, while not specifically mentioning Israel,
Summit participants congregate in front of the Royal Palace in Brussels
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was intended to reflect EC concern over recent
Arab moves to exclude that country from the
UN. The leaders also agreed upon a declaration
to be made in connection with the CSCE
summit meeting.
The leaders devoted scant time to EC
institutional questions, although Prime Minister
Wilson took advantage of this first summit meet-
ing since the UK referendum on EC membership
to discuss Britain's new commitment to Europe.
Britain withdrew its reservation on giving the
European Parliament significantly increased
authority over the EC budget, thus enabling the
foreign ministers this week to sign the necessary
documentation and pass it to the member gov-
ernments for ratification. In another move
involving the Parliament, the leaders set up a
committee to prepare a report for the next
European Council in November on the prospec-
tives for direct elections of national representa-
tives to Parliament by 1978. The foreign min-
isters were also charged with providing reports,
by year's end, on the prospects for an EC
passport union and on formulating community-
MBFR: DEADLOCK CONTINUES
The force reduction talks in Vienna have
adjourned until September, with the 22-month
deadlock still unbroken. Western representatives
hope that once the European security confer-
ence is out of the way, some progress can be
made in the next round by introducing Option
I I l--the West's nuclear proposal.
The nuclear proposal calls for the reduc-
tion in Western Europe of some US nuclear
warheads and delivery systems in return for a
withdrawal of a Soviet tank army and as firm a
Soviet commi+ment as possible to a common
ceiling for both Warsaw Pact and NATO forces
in Central Europe.
The West continued unsuccessfully to press
for a Soviet reduction in ground forces and a
common ceiling. Although pressed by Western
negotiators to exchange data concerning its
forces, the Eastern side continued to regard such
an exchange as "premature."
The Soviets continued to criticize the
asymmetrical approach advo-ated by the West
and demanded that the scope of the negotia-
tions be broadened to include reduction of air
and nuclear forces. They also continued to insist
that all West European participants-not just the
US-accept limitations on their forces from the
outset of the agreement.
The only new development came when the
East agreed to discuss how to distinguish ground
from air forces, but no agreement was reached
on definitions. The subject will come up again in
September.
The real focus of Western activity was at
NATO headquarters in Brussels, where the Allies
are still engaged in detailed discussions-
expected to continue into August-of the
nuclear option. Two particularly sensitive issues
were raised: possible limitations on West Euro-
pean armaments, and the issue of restraining
Soviet nuclear systems in the area. Other issues
under discussion included:
? The nature of a Soviet commitment to
a common ceiling for manpower.
? The possible inclusion of air as well as
ground force manpower in the common
ceiling.
? The extent to which these proposals
should be linked together and the appro-
priate time to introduce them at Vienna.
Some of the allies, particularly West
Germany, are extremely sensitive to any pro-
oosals involving limitations on Allied weapons.
Bonn might accept some restraints on man-
power, but virtually rules out any limitations on
West German armaments. The UK insists that
the West require a Soviet commitment to a
specifically enumerated rnmmnn piling.
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MULTILATERAL TRADE NEGOTIATIONS
A meeting of the trade negotiations com-
mittee in Geneva on July 15-16 set the stage for
substantive talks in the multilateral trade nego-
tiations now under way. Most of the indus-
trialized countries that are participating in the
talks were generally satisfied with their pace.
Tne developing countries, however, complained
that little has been done for them. Developed
and 'developing countries alike agree that early
progress in the talks is most likely in the area
of tropical products, of principal interest to the
developing countries. As the emphasis in the
negotiations shifts from generalities to specifics,
however, progress in other areas will be more
difficult.
The aim of the meeting last week was to
review the work since last February of six nego-
tiating groups and to give it impetus before the
main committee meets again in December. To a
large extent, the tone was set by a US proposal
to identify those areas in which, short of an
overall agreement, accords on "interim concrete
results" might be reached. The developing
states, looking for preferential treatment, gen-
erally favored the proposal.
Japan and the EC, who with the US are the
major participants in the talks, did not reject the
propo,-31, but neither did they endorse it. Japan
and the EC have long had reservations over an
early agreement, but both apparently felt that
the US proposal caused them fewer problems
than an earlier US suggestion that participants
attempt to establish interim deadlines for talks
in selected areas. Both feel that reaching a final
balanced agreement will be difficult in any case
and that failure to reach agreements on interim
goals could deal the talks a serious blow.
In talks with US officials in Brussels after
the committee meeting, EC Commission Vice
President Soames expressed only guarded ap-
proval of the US proposal in Geneva. Soames
did say that, although he could not agree to set
specific target dates for early achievements,
early progress could and should be made to
satisfy the demands of the developing countries
on tropical products. Another EC official said
he was satisfied that the Geneva meeting had
been able to end without the EC having been
forced to take a position on interim agreements.
In Brussels, the US and EC agreed to maintain
close bilateral consultations.
Working groups in Geneva conducting
negotiations on specific items will resume their
meetings in September. The groups will con-
tinue to seek a tariff-cutting formula and meth-
ods to remove non-tariff barriers to trade.
Agriculture will remain the mos+. difficult
topic, because the US and the EC still have
fundamentally different approaches. The US
wants to assure that negotiations on agriculture
are not isolated from talks in other groups so
that EC farm protectionism in fact becomes
subject to bargaining. The EC, fearful of attacks
on its agricultural policy, wants farm trade iso-
lated as much as possible from the negotiations
on industrial tariffs and non-tariff barriers.
Notwithstanding an agreement in May
between the US and the EC, which allowed
negotiations in the agriculture group finally to
get under way, fundamental differences are far
from resolved, and another impasse could de-
velop at any time.
The EC has also seized upon recent Soviet
grain purchases to promote their efforts to
incorporate into the trade negotiations the talks
on grain reserves now being held in London.
Commission Vice President Soames recently
questioned whether the large purchases, by
greatly reducing the amount of grain available
for stockpiling, do not vitiate US arguments for
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ARGENTINA: MORE CABINET CHANGES
President Peron, whose own days in office
may be numbered, was obliged to make further
cabinet changes this week. She accepted the
resignation, of embattled Economy Minister
Rodrigo, reviled for his support of economic
austerity and for his ties to the ousted Lopez
Rega. She also was forced to . r! ce her new
press secretary and the man whom only two
weeks 'ago sho had appointed to succeed Lopez
Rega as welfare minister. Both had been linked
to Lopez Rega. Still more cabinet changes are
rumored, particularly in the ministries of labor
and foreign relations.
The latest changes, the second major shuf-
fle in two weeks, were prompted by continuing
pressure from organized labor, backed by the
military. The officers also moved to eliminate
the residual influence of Lopez Rega by insisting
on his departure from Argentina; he quickly left
for Spain.
national assistance for its serious balance-of-
payments situation. Labor has refused to accept
that there is any need for decreased spending
and sacrifice. This week, labor leaders called for
further periodic wage increases, as well as price
controls and the nationalization of foreign trade
activities and the banking system.
Despite the changes at the top, the admin-
istration's woes continue. Critics have already
begun to charge that the newest welfare minis-
ter, Rodolfo Roballos, is also linked to Lopez
Rega. Moreover, work stoppages continue in
Buenos Aires and elsewhere. Striking doctors
were dispersed bS security forces; airline pilots
staged walkouts. in addition, the left-wing
Peronist youth group has calied for the resigna-
tion of Mrs. Peron, charging that her govern-
ment is not truly Peronist. Right-wing youth
replied by threatening with death anyone who
Named to take over the top economic
policy post is Pedro Jose Bonanni, a lawyer and
moderate Peronist who 20 years ago headed
Juan Peron's Finance Ministry. He should be
generally accepted. It would be difficult to at-
tack him politically, given his Peronist creden-
tials. He has given no indication of his policy
intentions, but further attempts at economic
austerity are high/ unlikely.
The repudiation of Rodv Igo and austerity is
another political victory for labor, but further
undercuts the country's ability to secure inter-
Lopez Rego
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CUBA FOCUSES ON THE CARIBBEAN
The Central Committee of the Cuban Com-
munist Party has reportedly decided to con-
centrate Cuba's attention in Latin America on
the Caribbean basin and de-emphasize attempts
to establish influence in South America. The
one key exception to the new policy is Peru,
where Havana will continue its efforts to de-
velop closer relations.
The decision probably stems partially from
Havana's desire to take advantage of the growing
sense of ideological compatibility with Cuba on
the part of some Caribbean leaders and of their
appreciation of the Castro regime's increased
respectability in the hemisphere. Since April,
the heads of government of Guyana, Trinidad
and Tobago, and Jamaica have visited Cuba and
been personally squired around the island by
Fidel Castro. Mexican President Echeverria will
travel to Cuba in August, and Prime Minister
Errol Barrow of Barbados may do so later this
year.
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GNAT
11o-5 61S
COS
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~-;ANA
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JAMAICA` HAITI}
CA U IIt/t/:',1 N
At the same time, the Cuban leadership
doubtless sees little prospect for inroads in
much of South America, either through conven-
tional diplomacy or subversion, given the
presence of entrenched governments hostile to
the Castro regime.
In specializing its focus on the Caribbean,
the Cuban leadership is undoubtedly in step
with Soviet advice to be more pragmatic in its
foreign policy. Earlier indications that the Cu-
bans arc: accepting Soviet guidance in Latin
America were the Cuban decision to eschew the
armed struggle, revealed publicly last October,
and the reported move to seek a reconciliation
with the Latin American Communist parties at
last month's Latin American Communist Party
meeting in Havana.
In the Caribbean, Havana's first priority is
those countries whose governments have demon-
strated an eagerness to move leftward and whose
smallness seems to make them more susceptible
to Cuban influence.
Havana places its greatest hopes in Jamaica
and Guyana. Their leaders have talked socialism
but could use help in developingica mass base,
organized for social and econom objectives,
that would back a move to the left. Havana
I
The Caribbean Basin
REPUBLIC
Puorlo Rico
SEA
VENEZUELA!
F*t'.cp
SUHlM1A 4Uv
C As de,r,r try C.1,
undoubtedly is urging them to create mass or-
ganizations and may even help them whenever
possible. Prime Ministers Manley of Jamaica and
Burnham of Guyana both returned from Cuba
with glowing praise for the Cuban model, and
plans are afoot for expanding Havana's ties with
both governments.
The Cuban leadership probably has greater
reservations about Trinidad and Tobago because
of the rivalry between Castro and Prime Minister
Eric Williams. Their competitive relationship
was reflected most recently when Castro re-
portedly rebuked Williams for negotiating eco-
nomic agreements with the European Common
Market at the expense of what Castro con-
sidered Caribbean unity.
The Cubans are probably increasingly opti-
mistic about their prospects for influence in
Honduras as a result of the rise to power of the
young turks in the Honduran military.
Havana will continue to work with Mexico
and Venezuela on Third World issues, but it
almost certainly realizes that the competition
for regional leadership among Castro and Presi-
den-l`s Perez and Echeverria limits the extent of
potential Cuban influence in either of these
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ECUADOR: PAYMEN IS PROBLEMS
Quito's long-standing dispute with the Tex-
aco-Gulf consortium that produces practically
all of Ecuador's oil will cause lower export
revenues this year. Progress is now being made
toward ending the dispute, but a continuing
boom in imports is likely to result in a large
current account deficit.
effect until last week-made it noncompetitive
with most crude oil from the Middle East. De-
clining tanker rates have reduced the short-haul
advantage Ecuador had for its crude, much of
which goes to Caribbean refineries via the
Panama Canal.
Oil shipments began to decline in May
1974, when the government slapped on con-
servation ceilings that forced Texaco-Gulf to
reduce output from 240,000 to 210,000 barrels
a day. Technical difficulties with the Trans-
Andean pipeline and consortium shutdowns
aimed at forcing policy changes led to further
cuts in production. Consequently, oil shipments
dipped 18 percent in 1974 and an additional 29
percent in the first half of 1975. Total export
earnings, which soared to $1.1 billion in 1974,
will slip to $1 billion this year even if oil ship-
ments soon regain their earlier peak level.
The dispute centers on Quito's oil tax
policy. Company officials maintain that the tax-
paid cost of $11 a barrel for Ecuador's crude-in
OAS: CUBA SANCTIONS
The sanctions against Cuba will prob-
ably be addressed by the OAS delegates now
in conference in San Jose, Costa Rica.
Amendments to the Rio Treaty-the official
business of the conference-snould be com-
pleted within a few days. Mexico then hopes
to present a resolution designed to allow
OAS members "freedom of action" on rela-
tions with Cuba-a proposal that most of the
delegates favor. The final decision to deal
with the Cuba problem at San Jose has not
been made, but Mexico appears to have the
votes to push it through.
The conference as constituted now is
not empowered to act or, this matter, but
the delegates can "reconvene" as an Organ
of Consultation immediately after the ;.:,ir-
rent session ends. A few governments prefer
favors rapid movement.
Page 16 WEEKLY REVIEW Jul 25, 75
Texaco-Gulf also has become increasingly
disturbed because the government has failed to
pay both the remaining $3 million due on a
25-percent equity purchased in the consortium
and a fair share of operating costs. Faced with
this as well as the tax and production-ceiling
disputes, the consortium abandoned explora-
tion, postponed plans for opening new fields,
and delayed expansion of the 250,000 - barrel
per day Trans Andean pipeline. The govern-
ment's oil policy also discouraged a consortium
of American firms from constructing a pipeline
spur to its concession this year.
To force Quito to come to terms, Texaco-
Gulf shut down production for two weeks in
May and suspended operations indefinitely in
early June. At the same time, it offered to make
new investments totaling $165 million in ex-
change for more conciliatory pc;0icies. On July
9, the government agreed to cut taxes by 43
cents per barrel; the consortium demanded a cut
of at least 60 cents. Quito probably will make
additional concessions soon because it cannot
afford a prolonged loss of oil revenues.
Increased expenditures on economic de-
velopment and welfare will bring an estimated
38-percent jump in imports this year. Although
Quito has temporarily banned automobile im-
ports and has restricted credit financing of other
purchases abroad, it has avoided severe curbs for
fear of hurting development programs and aggra-
vating inflation. Even if oil exports are promptly
resumed, a current account deficit of nearly
$400 million is likely.
Because foreign reserves totaled only $274
million at the end of May, Quito will seek for-
eign capital to cover the deficit. It probably will
be forced to rely mainly on commercial sources.
A request for $1 billion in credits from Middle
Eastern governments has been ignored.
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PERU: STRIKES IN AREQUIPA
A general strike in the southern city of
Arequipa this past week ed to several clashes
with the police and caused the government to
decree a state of emergency in Arequipa,
Moquegua, Tacna, and Puno provinces and to
suspend constitutional guarantees.
Four cabinet ministers flew to Arequipa-a
long-time center of anti-goverment opposition-
to seek an accommodation with the workers.
Although they made a number of concessions,
the talks broke down. The press reports 50,000
workers went on strike. The government's show
of force, however, caused the strike to end
shortly after the emergency decrees were ini-
tiated. The basic issue-inadequate wage in-
creases to compensate for price hikes resulting
from the termination of government subsidies
for important items-does not appear near
resolution, however, and tabor unrest may
spread to other parts of Peru.
Worker dissatisfaction with the economic
decrees issued by Prime Minister Morales Ber-
mudez on June 30 is widespread. These meas-
ures were designed to combat spiraling inflation
and a growing budgetary deficit. The plan calls
for the reduction-and in some cases the re-
moval-of government subsidies on essential
agricultural and petroleum products, and for
wage increases to help offset the price hikes.
Labor groups, however, argue that the wage
increases are not commensurate with the price
hikes.
It is also quite probable that the commu-
nist General Confederation of the Peruvian
Workers was using the strike to warn against
anti-communist tendencies in the government.
The confederation has long supported the gov-
ernment's policies, but the shifting of power
from Velasco to the more moderate Morales
Bermudez has caused it considerable concern.
Morales Bermudez' economic policy has
been a matter of controversy since he suspended
Velasco's use of economic subsidies to help
Peru's lower classes. If it provokes increased
opposition, Morales Bermudez' present strength,
together with his prospects for succeeding
'/elasco as president, will eventually be weak-
ened. The government's flexibility in last week's
negotiations may indicate that he recognizes
that he must seek some compromise with the
workers to avoid a confrontation that would
play into the radical opposition's hand.
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BRAZIL: LIBERALIZATION ATTACKED
Conservative military opponents of Presi-
dent Geisel are exerting strong pressure to force
him to abandon his program of political liberal-
ization. No direct confrontations have occurred,
but during the past month security forces on
their own authority have accelerated their ar-
rests of communists and leftists, and a new
series of anonymous pamphlets attacking Geisel
personally has been circulated among high-
ranking officers.
About 100 leftist opponents of the regime
have been taken into custody in several states.
Despite the President's strict orders against
torture and illegal detention, some of those ar-
rested in Sao Paulo reportedly were initially
mistreated and held without the required notifi-
cation being given within 48 hours after arrest.
Meanwhile, right-wing publications linking gov-
ernment leaders to international communism
have appeared for the second time this year.
The reasons for the resurgence of concern
at this particular time are not clear. Geisel has
not made any major political changes recently,
nor has he indicated that he plans to do so. It
may all be an effort to block the appointment
of a strong liberal to replace General Golbery,
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There is no firm evidence. that opposition
to Geisel is well organized or widespread enough
to pose a serious threat to the stability of his
government. The attacks apparently are in-
tended to warn him that he may already have
gone too far in promoting liberalization. By
initiating a controlled dialogue with politicians,
Geisel departed substantially from the attitudes
of his predecessors. Fresh indications of con-
tinuing strong opposition to these moves make
further significant liberalization unlikely in the
PANAMA: OPTIONS ON THE CANAL
Senior Panamanian officials, pessimistic
about the canal treaty negotiations with the US,
are discussing possible courses of action.
General Torrijos and his
advisers are concentrating on three options:
The first involves compromising on some
treaty issues in order to reach an agreement this
year, with the understanding that US ratifi-
cation would probably be delayed until 1977.
The Panamanians believe this course would
retain the confidence of foreign investors, but
by forcing the government to yield somewhat
on key issues would incur opposition from cer-
tain student and other nationalist groups.
The second alternative, to draw out nego-
tiations until 1977, would involve taking a
tough stance on key issues in the belief that the
US position would become even more vul-
nerable as a result of intensified world-wide
criticism. It is felt that this international pres-
sure would force Washington to grant more
extensive concessions prior to the conclusion of
any treaty.
The third option would be to admit that
the negotiations had broken down and to move
toward a possibly violer,!. confrontation with the
US. The authorities would allow students to
make incursions into the Canal Zone, take the
issue before the UN, and begin a vitriolic anti-
US propaganda campaign. This approach would
entail serious drawbacks. Disorders would ag-
gravate existing economic problems, and the
government might have difficulty maintaining
control once anti-US activities had begun.
Torrijos seems to be trying to gauge the
mood of the public before deciding on a course
of action. Thus far, he has mixed moderation
with pressure, but may decide later to use some
parts of each option.
The general appears to want to continue to
negotiate. The pro-government press stresses
that Torrijos is convinced this is the best path to
achieve Panama's aspirations. The US embassy
has been told that Vice President Arturo Sucre
was removed because he opposed compromise in
the negotiations. At the same time, however,
Torrijos has muddied the water by declaring he
no longer feels bound to protect the confiden-
tiality of the talks. Panamanian officials have
begun making public the details of the nego-
tiations. These statements could make it diffi-
cult for the Panamanian negotiators to retain
flexib;lity on certain key issues.
Torrijos may have decided that the possi-
bility of a new treaty in effect before 1977 is
very remote. He almost certainly believes, how-
ever, that considerably before that time he must
have a major accomplishment, such as the sign-
ing of a draft, to show the people. If he is
unable to produce such an accomplishment
through negotiation, he will more than likely
give serious thought to the possible benefits-as
well as hazards-of using violence. F_
~cvi
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Communist efforts to assert more author-
ity-at least on the national level-have slowed
down since the end of the communist central
co:, mittee meeting in Sam Neua in late June.
Communist Deputy Prime Minister Phoune
Sipraseuth told a Western military attache on
July 17 that leaders in Sam Neua had decided
that the revolutionary process had been pushed
too rapidly and had caused an unacceptable
amount of popular discontent. He estimated
that the "revolution" at its present pace would
not be completed for two years.
In Vientiane, the communists are still
chipping away at the coalition facade, but there
have been few dramatic chances in recent weeks.
The Joint Commission to Implement the Agree-
ment, which had been active in negotiating
thorny cease-fire issues and enjoyed equal status
with the cabinet, has been declared "unneces-
sary" and dissolved. The Joint National Political
Council, which supposedly sets policy guidelines
for the cabinet, has postponed its summer ses-
sion until October. Non-communist cabinet
ministers are virtually powerless. Defense Mi-i-
ister Pheng Phongsavan, at one time a force in
his own right, cannot even sign chits authorizing
use of gasoline. Deference continues to he paid
Prime Minister Souvanna Phouma, however, and
his presence in the country may serve to inhibit
those communists who would like to push the
revolution with more vigor.
Reports from the countryside suggest that
the communists are moving more rapidly toward
setting up a traditional communist administra-
tive system in the provinces-particularly in the
south. Non-communist police and military units
have been disarmed, communist officials
installed in local government posts, hair and
dress regulations promulgated, and in some areas
the Lao flag discarded. In the city of Thakhek in
the central panhandle, several reports indicate
that earlier this month several students and
Pathet Lao troops
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other young people were seriously injured when
Pathet Lao troops used gunfire to enforce an
order. In response to these measures, former
officers and government officials have been
slipping across the border to Thailand. No
organized resistance has been reported, nor is it
likely to develop.
The Lao-perhaps in an effort to remove
foreign witnesses to their activities in the coun-
tryside-are eliminating all non-communist
diplomatic presence outside Vientiane. The Thai
have closed three consulates because of un-
certainty about the safety of their personnel.
The French have been asked to close their three
small military missions in the provinces, and
Japanese and Australian voluntary agencies are
bringing their activities outside the capital to an
end. Travel by foreigners outside the capital has
also been limited.
Pressure is building on non-communist
diplomatic missions in Vientiane, although they
are not being subjected to the kind of intense
harassment directed at the US embassy. All are
finding it increasingly difficult to transact
business with the government. In contrast, the
Soviets claim they have no problems. A pro-
communist Vientiane daily recently lumped the
Australians with the Thai as "obstructors of
progress toward national reconciliation." Leftist
students, who in the past have been important
communist provocateurs, now claim to be
"examining the size of foreign diplomatic mis-
sions."
The South Koreans are taking steps to
improve their naval capabilities vis-a-vis North
Korea. North Korea has expanded its naval
shipbuilding in the last six years, but Seoul has
done comparatively little. South Korea's major
surface force-ten destroyers and destroyer
escorts-was provided by the US, although the
South recently began construction of a multi-
mission patrol boat.
Seoul has been anxious to obtain naval
cruise missiles to counter North Korea's Styx
missiles. For the past two years, the South has
sought the US Harpoon system and would like
to begin installing them next summer on their
newer generation patrol boats. The Harpoon,
however, is only now becoming available for US
use and is not scheduled for delivery to South
Korea before mid-1977. Seoul reached an agree-
ment with Paris earlier this year for the Exocet
missile system, but with the understanding that
the deal would not go through if delivery of the
Harpoon can be expedited.
As on interim measure, Seoul is installing
US Standard antiship cruise missiles or. three
patrol boats; two missile systems will be opera-
tional by the middle of August and the third
shortly thereafter. A fourth patrol boat will be
outfitted with the Standard in the next few
months. It probably will be awhile, however,
before the ships are fully operational. These are
the first South Korean ships to be equipped
with naval cruise missiles and will give Seoul's
navy greater firepower. The Standard is a match
for North Korea's Styx missiles and, if based
near the Northern Limit Lines, the patrol boats
could quickly respond to naval incidents.
In addition, Seoul has approved plans for a
1,200- to 1,500-ton destroyer, South Korea's
first attempt to design and build such a ship. it
reportedly will be built by the Hyundai
Shipbuilding Company at a cost of $78 million.
Specifications and possible weapons systems are
now being studied, but no date has been set to
start construction. The South Koreans estimate
the ship will be operational within two years
after construction begins. They may eventually
place cruise missiles on board the destroyer,
probably Harpoons when they are available. 25X1
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