EAST ASIA BIWEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A002200010023-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 12, 2016
• Document Release Date: January 25, 2002
• Sequence Number: 23
• Publication Date: June 27, 1978
• Content Type: REPORT

National Secret
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Assessment ORCON
East Asia
Biweekly Review
Secret
RP EABR 78-013
27 June 1978
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EAST ASIA BIWEEKLY REVIEW
27 June. 1978
CONTENTS
Malaysia: Election Preview . . . . . . . . . .
The position of Prime Minister Hussein and
the ruling National Front is fairly secure
as a result of Malaysia's sound economy and
fragmented political opposition.
A Shifting Course in Philippine Power Politics . . . 3
There are increasing indications that De-
fense Secretary Enrile has lost ground as
a result of recent shifts in command in the
armed forces, while the position of Major
General Fabian Ver has been strengthened.
China - North Korea: Increased Oil Su l
In a move to supplant the Soviet Union as
the primary supplier of oil to North Korea,
China has reportedly agreed to sharply in
creased oil exports.
This publication is prepared for regional specialists in the Washington community by
the East Asia/Pacific Division, Office of Regional and Political Analysis, with
occasional contributions from other offices within the National Foreign Assessment
Center. Comments and queries are welcome. They should be directed to the authors
of the individual articles.
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Malaysia:. Election Preview
On the eve of a national parliamentary election and
10 state elections, the position of Prime Minister Hussein
Onn and the 10-party ruling National Front he leads is
fairly secure. Malaysia's sound economy combined with a
fragmented political opposition will probably produce a
strong Front showing. Nevertheless, latent racial ten-
sion and strains between conservative and moderate Malays
might cut into Front strength, particularly that of
Hussein's own party, the United Malays National Organiza-
tion. Hussein's postponement until after the election of
the UMNO General Assembly--at which he expects to be con-
firmed as party president--suggests that these divisions
have already affected the Prime Minister's election
strategy.
Although the legal deadline for the next election
was not until late 1979, Hussein's decision to call one
for 8 July came as no surprise. Malaysia's economy,
which has grown impressively in 1978, is expected to
slow down by next year. Moreover, the two opposition
parties of any significance--the conservative Malay
Islamic Party (-PAS) and the Chinese Democratic Action
Party (DAP)--are both at low points. PAS was soundly de-
feated in the Kelantan State election last March by UMNO
and Berjasa, a non-Front Malay party that worked closely
with UMNO. The DAP has suffered from internal leader-
ship struggles.
Hussein's record on issues other than economic ones
will also work to the Front's favor. The Prime Minister
has won general approval for working to reduce communal
tensions, cracking down on corruption, stepping up opera-
tions against Communist insurgency, and promoting friendly
relations with Communist nations--including Vietnam and
Cambodia--while remaining neutral in the Sino-Soviet
rivalry and reiterating Malaysia's desire to gain interna-
tional recognition of Southeast Asia as a zone of peace,
freedom, and neutrality.
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What is less clear is why Hussein chose to postpone
the UMNO General Assembly--originally scheduled for
22-25 June, a period now included in the 17-day campaign
leading up to the election. Hussein, who has been acting
president of UMNO since assuming the premiership on the
death of his predecessor in early 1976, probably would
have preferred to be confirmed as UMNO leader before
starting to campaign. This would not only have enhanced
his political standing nationally, but would have given
him a freer hand to shift or remove certain UMNO members
in the cabinet whose views Hussein does not share.
The election announcement and simultaneous post-
ponement of the General Assembly earlier this month
may reflect increasing uncertainty on Hussein's part
over a harmonious UMNO convention. One element of UMNO
in particular--the Youth League--is angry over Hussein's
refusal to pardon former Youth League President Harun
and renounce plans for establishing a predominantly
Chinese university. Although this group would not threaten
Hussein's chances for the party presidency, it might em-
barrass him by nominating someone else or staging a
walkout.
A strong showing nationally may not ensure a smooth
UMNO convention, but it would probably minimize acrimony.
Hussein has moved to prevent flareups of racial tension
and charges of government favoritism toward Chinese during
the campaign. The government has stepped up naval patrols
to minimize the number of refugees arriving from Indo-
china--many of whom increasingly have been Chinese--and
it has banned all rallies during the campaign period.
The government's arrest in April of the DAP chairman
for allegedly violating the official Secrets Act--al-
though done after a thorough, two-year investigation--
may also have been aimed at currying favor with the
Malay electorate while discrediting a Chinese opposition
leader among non-Malay voters. (SECRET NOFORN)
27 June 1978
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A Shifting Course in Philippine Power Politics
There are increasing indications that Defense Secre-
tary Enrile--President Marcos' senior military adviser
and long considered to be one of the front-runners in
any power struggle to succeed the Philippine leader--has
lost ground as a result of shifts in command within the
Philippine armed forces. The recent round of retirements
and promotions appears to have strengthened the power
position of major General Fabian Ver--one of Marcos's
closest confidants and the man responsible for all security
and intelligence matters relating to the President's
safety. In addition, it seems that with the retirement
of certain general officers in the Philippine Constabulary--
the largest and politically most important of the four
major military services because of its police role under
martial law--its chief, Major General Fidel Ramos, has
been left with virtually no control over key staff and
operational commands.
Enrile Losing Ground
This is not to suggest that there is a dramatic or
imminent power-struggle in the Philippines, but the re-
ports suggest that Enrile's base of support within the
armed forces has been greatly reduced to Ver's benefit
and with that shift a consequent decline in the Defense
Secretary's political fortunes. Heretofore President
Marcos has been careful to prevent either Enrile, Ver,
or Ramos from gaining sufficient strength to pose a threat
to him. Well aware of the antagonisms between them,
Marcos attempted to keep them divided against each other
and their influence relatively balanced.
From time to time, however, Marcos and Enrile have
had disagreements over policy, such. as the Defense Sec-
retary's heated objections to the negotiations in Tripoli
that cumulated in a ceasefire arrangement with the Mus-
lim insurgents in December 1976. Usually these disagree-
ments have involved Enrile's preference for a tough,
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no-nonsense approach to problems, in contrast to Marcos'
preference for a more politically subtle course.
Enrile's Attitude on US Bases Talks
In this regard, President Marcos recently went out
of his way to convince US officials that during Vice
President Mondale's visit he personally overruled Enrile's
objections to a joint US-Philippine statement affirming
the value of the US bases to the mutual defense of both
countries. As the President's closest adviser on mili-
tary matters, which includes the terms and issues re-
lating to the bases negotiations, Enrile has consistently
taken a hard line, appearing at times almost inflexible
in his position. Enrile appears basically well disposed
toward the US, but his attitude reflects his determina-
tion to support the demands of the armed forces hierarchy.
Enrile also recently voiced his objections
to the 3 May agreement between Vice President Mondale
and President Marcos to have the Philippine and US command-
ers work out the details of combining the two principles
of Philippine sovereignty and unhampered US command and
control. After clearly defined operational arrangements
at the bases are worked out at the military level, they
are to be submitted for diplomatic review. Enrile has hinted
that General Romeo Espino, commanding general of the
armed forces, and other supporting personnel would be
more susceptible to US pressure on military issues, than
civilian members of the Philippine negotiating panel.
Enrile and Imelda
Its common knowledge that the Philippine First Lady
and Enrile have been at odds with each other for years.
Imelda Marcos has long considered the Defense Secretary
to be her greatest obstacle in any effort to succeed
her husband.
rs. Narcos
financially and that the 54-year-old Defense Secretary--
perhaps the third most powerful person in the Philippines
after President Marcos and his wife--was weary of the
struggle with the First Lady and seriously considering
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resignation. Other reports over the past several months
suggest that Enrile's political ambitions have been tem-
pered--primarily by the First Lady's running feud with
him and also by Major General Ver's increasing influence
within the Marcos inner circle.
Prospects
Enrile may be inclined to turn his attention more
to his private business affairs. There is, however, no
indication that Marcos is trying to force the resignation
of his loyal friend, who as his personal attorney has
handled his private financial affairs for many years.
Nevertheless, it seems apparent that General Ver
is now the most influential man in the Philippine armed
forces and may even aspire to Enrile's post as Defense
Secretary. He is also--because of his responsibility
for the security of the Presidential family--in close
contact with the Philippine First Lady. He has been
prudent in his remarks about her, but some of his col-
leagues contend that he likes her no better than they
do.
Ver's seeming consolidation of power at the expense
of Enrile comes in the wake of indications that younger
officers in the Philippine armed forces are becoming
increasingly dissatisfied with Marcos. Most of these
officers are intensely nationalistic, idealistically
motivated, and deeply resent the corruption they perceive
at various strata of the government bureaucracy. Their
goals are undefined, however, beyond their strong anti-
Marcos convictions. The lack of any unified civilian
opposition poses a further complication for them.
As the overseer of the Philippine intelligence net-
work, General Ver presumably has been able to monitor
this dissidence. With second-level command shifts re-
ported in the offing, he will be in an even more favorable
position to influence the advancement of younger officers
and further strengthen his options in any succession
struggle--either as leader himself or the power behind a
civilian government. (SECRET NOFORN-NOCONTRACT-ORCON)
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China - North Korea: Increased Oil Supply
In a move to supplant the Soviet Union as the pri-
mary supplier of oil to North Korea, China has report-
edly agreed to sharply increased oil exports. The in-
creased oil will alleviate recent shortages in North
Korea caused by two years of declining Soviet oil ex-
ports. The Soviet Union has also stated that it will
increase exports somewhat above last year's low levels.
The Soviet Union was the only significant supplier
of petroleum to North Korea until 1973. Soviet supply
peaked at 1,100,000 tons in 1975 and fell off to 780,000
tons last year. Increased Soviet prices combined with
inadequate North Korean exports of cement and other ma-
terials are perhaps responsible.
During his trip to Pyongyang in May, Chinese Pre-
mier Hua Kuo-feng reportedly agreed to provide North Ko-
rea 1.5 million tons of oil. It is not clear if the en-
tire amount is to be delivered in 1978 or spread over a
number of years. The oil promised by Hua evidently is
in addition to?a previously negotiated 1 million ton
barter agreement. Since 1973 Chinese oil deliveries
have increased gradually to 850,000 tons last year.
Thus in 1977 Pyongyang received an estimated 1.6 mil-
lion tons from both sources. This amount was not enough,
however, to prevent shortages in civilian sectors of
the economy.
The Chinese are currently aiding in the construc-
tion of a petroleum refinery in North Korea just across
the border from China. Limited operation could be pos-
sible by the end of the year. A pipeline is under con-
struction south toward Pyongyang. In addition to the
petroleum, Hua offered hydroelectric power equipment
and a number of small factories to aid North Korea's
Seven-Year Plan, which began this year.
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North Korea has taken advantage of its coal and
hydropower resources to minimize its dependence on pe-
troleum. Demand has nevertheless increased rapidly as
a result of new oil burning industries, agricultural
mechanization, and a general military buildup. Caught
between the Soviet squeeze and a critical shortage of
hard currency to purchase oil on the open market, Pyong-
yang has been negotiating with a British firm for an
offshore oil exploration program and has been drilling
on its own but with no success. The Chinese oil should,
therefore, be warmly welcomed in Pyongyang. (SECRET
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