CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024900030001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: November 25, 2003
• Sequence Number: 1
• Publication Date: July 18, 1973
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
DIA and DOS review(s) completed.
Top Secret
C
18 July 1973
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1.8 July 1973
Central Intelligence Bulletin
CAMBODIA: Communists hold military initiative on
almost all fronts. (Page .1)
AFGHANISTAN: Former prime minister in control in
Kabul after coup. (Page 2)
LIBYA: Qadhafi reportedly plans "march on Cairo"
to demand union on his terms. (Page 3)
EAST GERMANY - BERLIN: Pankow apparently backs
down on East Berlin access issue. (Page 5)
ARGENTINA: Peron's effort to form national unity
government draws leftist opposition. (Page 6)
FRANCE-EC: Paris considers extending European
political and defense cooperation. (Page 7)
ITALY: New Rumor government aims to press anti-
inflation drive. (Page 9)
PHILIPPINES-MALAYSIA-INDONESIA: Sabah dispute and
Muslim rebellion put on back burner. (Page 10)
FOR THE RECORD : (Page 11)
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CAMBODIA: With the rainy season two months
along, the Khmer Communists still hold the initiative
on almost every military front.
Since late May, the insurgents have shifted
their attention from isolated provincial capitals
and distant stretches of key highways to the Phnom
Penh area. According to the latest estimate by the
US defense attache, 57 enemy battalions totaling
17,000 men are now located within a 25-mile radius
of the capital. The bulk of these units are concen-
trated south and southwest of Phnom Penh, but sizable
forces are also operating north and northwest of
the city. Despite continued heavy air strikes, the
insurgents have retained the offensive, gained ground
against numerically superior government defenders,
and increased the flow of refugees toward Phnom Penh.
Barring major manpower and supply problems or
unusually early flooding, the insurgents in the Phnom
Penh area can be expected to remain on the attack--
at least for the next few weeks. Prospects for any
dramatic improvement in the Cambodian Army's per-
formance are bleak. Government strength has been
severely taxed by the recent steady fighting, and
only intense US air support has limited insurgent
gains. Few units remain in the capital's general
reserve, and each new threat prompts a complex jug-
gling of units from less active fronts. Corruption,
poor tactical planning, and. mismanagement of re-
sources at command levels continue to compound lack-
luster field leadership, and morale--already pre-
carious in a number of outfits--shows signs of
falling even further as the bombing deadline ap-
proaches. Although the small Cambodian Air Force
is becoming more efficient, its ability to offset
the impending loss US air support on 15 August
is quite limited.
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C AFGHANISTAN: Former prime minister Daud ap-
pears to be in complete control in Kabul but the
situation in the rest of the country is still un-
clear.
Almost nothing is known about the form of the
new republic or the composition of the new govern-
ment. Questioning by the US ambassador revealed
that a spokesman for the foreign ministry did not
even know what Daud's title is.
There are contradictory reports as to whether
several key figures in the previous government have
been executed, including Prince Abdul Wali--Daud's
cousin--who was generally regarded as the most im-
portant man in the country after the King. There
is no confirmation of reports that Prime Minister
Shafiq has been arrested.
The Afghan foreign ministry has repeated Daud's
assurances that foreign policy will continue to be
based on the principles of nonalignment. Daud's
alleged pro-Soviet tendencies, however, are cousin
concern in Tehran.
Daud may well lean more toward the USSR than
recent Afghan governments did, but he is likely to
retain Afghanistan's traditional policy of playing
the great powers against each other. The Soviets
have reported the coup factually and without com-
ment. They have also reported Daud's statements
regarding Afghanistan's foreign policy of "peace
and friendship with all nations."
Islamabad has announced that it wants good
relations with Afghanistan to continue, but the
Pakistani charge in Kabul expects relations between
the two countries to deteriorate. Daud is a long-
time advocate of independence for Pakistan's two
frontier provinces. In his initial national broad-
cast yesterday, Daud said this was Afghanistan's
18 Jul 73
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LIBYA: President Qadhafi, badly stung by dif-
ferences with his Egyptian partners over the pro-
posed merger, may be planning a popular "march on
Cairo" to demand his own formula for union.
During his recent three-week stay in Egypt,
Qadhafi was deeply frustrated by the negative atti-
tude of many Egyptians toward his concept of union
and the cultural revolution. Characteristically,
he hopes to counter with a dramatic show of popular
support for his position. Several thousand Libyans
reportedly are to depart for Egypt today in a motor-
cade scheduled to arrive in Cairo on 23 July--the
anniversary of the Egyptian revolution. The demon-
strators apparently intend to present President
Sadat with a charter charging him to establish a
"complete" union based on "popular" and Islamic
principles.
Qadhafi presumably hopes that the rally will
force Sadat to abandon his gradualist approach to
merger. The march, however, is likely to run into
difficulties before it ever reaches Cairo. The
logistical problems of transporting the demonstrators
across Libya will be formidable, and the march could
run into trouble when it reaches the Egyptian border.
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Should the cavalcade ever reach its destination,
it could prove very embarrassing to President Sadat.
Whatever its impact on the Egyptians, the march
is certain to contribute to turmoil in Libya.
Qadhafi's prolonged absence from Tripoli--he is now
in Benghazi--has caused a serious leadership vacuum
which none of Qadhafi's colleagues on the Revolu-
tionary Command Council (RCC) has filled. Military
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(continued)
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Qadhafi, however, apparently is not ready to
put his own house in order nor is he willing to
moderate his position on union, despite considerable
pressure from the RCC and President Sadat. His
decision to sponsor the march clearly indicates
that he is willing to place his prestige and perhaps
his leadership behind his demands.
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EAST GERMANY - BERLIN: Pankow apparently has
reversed its earlier decision to restrict visits of
West Berliners to East Berlin during the World Youth
Festival from 28 July to 5 August.
After rejecting a number of applications for
visits last week, the East Germans began issuing
entry permits again over the weekend. In a discus-
sion with a West Berlin Senat official on 16 July,
an East German representative claimed that over
150,000 entry permits have been issued, that all
would be honored, and that Pankow considers the
matter "closed." The Senat has confirmed that East
German processing officials have told West Berliners
they may travel.
Pankow's reversal may be due in part to the con-
siderable publicity that West Berlin and West German
media gave its earlier decision to restrict access.
Pankow reacted quite defensively, and the East German
leaders might believe that continuing publicity would
reflect badly on them as hosts of the festival. In
light of a spate of recent incidents at the Berlin
Wall, they may also have feared that an intransigent
posture would encourage additional incidents that
would be embarrassing during the festival.
It is also possible that the Soviets exerted
pressure on Pankow to back down. The Western allies
have reminded the Soviet ambassador to East Germany
of their concern that existing travel agreements
not be violated. The Soviets, who are interested
in having a successful festival and generally in
avoiding problems with the West, might have suggested
to Pankow that it find other means to control Western
visitors.
Central Intelligence Bulletin 5
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ARGENTINA: With preparations under way to in-
stall Juan Peron in the presidency, the former dic-
tator's efforts to form a national unity government
are meeting opposition from leftist elements of the
Radical Party as well as his own. There is also
growing concern over whether Peron's health can
withstand the pressures of the office.
Provisional President Raul Lastiri is expected
soon to set a date for presidential elections--
26 August has been mentioned most frequently. Ef-
forts are continuing to establish an electoral alli-
ance between the Peronists and the Radical Party by
arranging for Radical leader Ricardo Balbin to join
the ticket as Peron's vice presidential candidate.
It is doubtful that Peron will face any significant
opposition, although an attempt might be made to
organize a leftist electoral front.
Balbin must still overcome some opposition
within the Radical Party to cooperating with Peron,
but the potential fruits of such an alliance should
overcome the objections of Radical purists. At the
same time, the Peron-Balbin alliance could run into
opposition from Peronists who fear that Peron, 77
years old with deteriorating health, will not live
out a full term.
Leaders of the Peronist left are more concerned
that the proposed alliance between Peron and Balbin,
which has the blessing of the military, signals a
shift to the right. Peronist extremists have not
criticized Peron so far, but have accused his closest
aides of being agents of imperialism. Some leftist
extremists are referring to the removal of Campora
as a coup from the right.
To contain this rising opposition, Peron appears
to be trying to isolate the extremists while attract-
ing a broad spectrum of political moderates into his
government of "national unity." This tactic is
likely to include a tough line against extremists
and terrorists, combined with moderate economic
policies. To maintain the support of the moderate
and nationalistic left, Peron will probably emphasize
an "anti-imperialist" foreign policy and maker
concerted drive for "Third World" leadership.
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FRANCE-EC: Paris is seriously considering the
problems of extending European political and defense
cooperation.
According to the Quai deputy director for West-
ern European affairs, France has not yet reached a
final decision on the form it prefers for the pro-
jected "European union." Paris is thinking of a
"two-pillar" framework: a "European federation,"
under the Treaty of Rome, to handle economic subjects
covered by that treaty; and, a "European confederation"
to treat broad political and defense issues. The
"pillars" would be linked by various committees and
would be capped by a "European union" that could pro-
vide the main means of coordination between the "pil-
lars," possibly by "European ministers."
The French official stated that he expected the
political directors of the EC foreign ministries
might begin discussing defense issues as part of their
overall work program. He implicitly acknowledged
that this would mark a new departure, because France
previously had generally opposed discussion of de-
fense topics in this forum. He said Paris sees no
conflict between such discussions and the activities
of the Eurogroup nor any reason why defense talks
among the EC Nine could not be separated from Euro-
group discussions.
Although President Pompidou has long favored a
"two-pillar" approach to European integration, the
practical problems of maintaining the distinction
are serious. The political. dimensions of the eco-
nomic issues the EC institutions in Brussels deal
with will become even more significant as the com-
munity moves toward full economic and monetary
union. While Paris has gone to great lengths to
try to keep the system of political consultations
separate from the working of the EC institutions,
all of the members now realize that some overlapping
is inevitable. A report on the working relationship
between the two sets of institutions is set for
further consideration by the EC foreign ministers
in Copenhagen next week.
(continued)
Central Intelligence Bulletin
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Finally, as the efforts to coordinate the for-
eign policies of the member states have been extended
to more and more topics, the need for a formal organi-
zation, which Paris has consistently blocked, has
become increasingly evident. Should France now pro-
pose to use the EC political consultations as a forum
for military cooperation, it will again have tolface
the need for a secretariat and permanent staff. 25X1
Central Intelligence Bulletin
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ITALY: The new Rumor government will give
top priority to controlling Italy's rapid inflation.
Recently announced policies are aimed at curbing
price increases by limiting government spending,
broadening the government's power to control prices,
instituting a rent freeze, and continuing to re-
allocate credit into productive investment. The
government's program relies heavily on fiscal pol-
icy and anticipates that its effectiveness will be
enhanced by full implementation of Italy's new tax
system in early 1974.
This approach reflects a shift from the expan-
sionary policies favored by Prime Minister Andre-
otti's government, which pushed economic recovery
at the expense of price stability. Recent signs
of a pickup in the rate of growth in industrial
production and in investment activity will facili-
tate the shift in policy. Current efforts to con-
trol Italy's spiraling prices have been spurred by
the continued lack of confidence in the lira and
the recent acceleration of the rate of inflation,
which is now one of the most rapid among industrial-
ized countries.
Failure of the new measures to curb
inflation
could endanger the economic upturn. If p
rices con
tinue to climb at their current annual ra
te of 11
percent, the labor unions probably will c
all for
inflationary wage increases to supplement
recently
negotiated wage contracts and might renew
strike
activity
which would disrupt production.
Delayed
economic
recovery would probably postpone
Rome's
decision
eventually to join the joint EC
currency
float.
Central Intelligence Bulletin 9
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PHILIPPINES-MALAYSIA-INDONESIA: Attempts to
settle the Philippine-Malaysian dispute over Sabah
and foreign support for the Muslim rebellion in the
Philippines have advanced little since the June tri-
partite discussions in Hong Kong. At that time the
parties had agreed to try to organize another ses-
sion by late June, but it has not yet materialized.
President Marcos triggered larger regional in-
volvement in March by telling his ASEAN partners
that he was about to publicize Malaysia's alleged
role in the flow of assistance from Sabah to Muslim
rebels. The generally unsympathetic regional reac-
tion to his charges, however, may have convinced
him that there was no advantage to be gained by
continuing to press the issue. Moreover, at least
some Philippine Government officials believe that
Malaysia has subsequently tried to reduce the level
of support from Sabah.
The Philippine domestic situation has also
changed since April. The Muslim rebellion has
quieted down somewhat as the government has backed
away from its initial aggressive military approach.
President Marcos himself is currently preoccupied
with plans for a national referendum on martial law,
scheduled for later this month.
Neither Malaysia nor Indonesia is pushing to
resume tripartite talks on Sabah, although the
three principals continue to discuss the problem
informally in other forums. Malaysia is apparently
having second thoughts about Marcos' willingness
to honor any agreement to relinquish the claim.
Although it would be a feather in Jakarta's cap to
preside over final resolution of the long-standing
Sabah dispute, Indonesia sees no advantage in try-
ing to force the pace of negotiations now that the
issue no longer strains ASEAN unity.
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Jordan-Tunisia: Jordan has decided to break
diplomatic relations with Tunisia in retaliation for
President Bourguiba's proposal that a Palestinian
state be carved out of Jordan. Jordan's action fol-
lowed Bourguiba's confirmation to the Jordanian
ambassador that he would not back down on statements
made in a press interview on 6 July, in which he
characterized Jordan as an artificial state which
should be replaced by a Palestinian nation.
*These items were prepared by CIA without consultation
with the Departments of State and Deffense~
Central Intelligence Bulletin 11
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Top Secret
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