CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019700100001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: February 25, 2004
• Sequence Number: 1
• Publication Date: August 12, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intellz~ence Bulletin
Secret
N2 42
12 August 1971
State Department review completed
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No. 0192/71
12 August 1971
Central Intelligence Bulletin
CONTENTS
USSR-ROMANIA: The temperature of the dispute has
been raised. (Page 1)
CYPRUS: The intercommunal talks. (Page 2)
ARAB FEDERATION: Meeting in Damascus. (Page 3)
PORTUGAL: The new press law. (Page 6)
EAST GERMANY - WEST GERMANY: Steel imports. (Page 7)
SOMALIA: Suspicion of foreigners. (Page 8)
EQUATORIAL GUINEA - SPAIN: Relations have stabilized
for the time being. (Page 9)
INTERNATIONAL MONETARY DEVELOPMENTS: Speculative ac-
tivity subsides (Page 11)
BOTSWANA: Pullout by West German firm (Page 11)
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USSR-ROMANIA: Authoritative Soviet and Romanian
pronouncements have raised the temperature of the
dispute between the two countries.
The Soviet weekly Literaturnaya Gazeta yesterday
reprinted an article, which had first appeared in the
Polish party daily on 30 July, that implicitly but
clearly criticizes Bucharest's policies. The article
claims that China regards the USSR as its chief enemy
and goes on to say that "all nods of approval for
Peking's splittist policy cannot be considered as
anything but harmful to the unity of the socialist
community." The article warns that there can be no
"neutral stand" on this issue and that "the attitude
toward the Soviet Union and the CPSU is a gauge of
the attitude toward the fundamental interests of
the socialist community."
Romania, however, shows no sign of retreating
from its independent stance. An article yesterday
in the party daily Scinteia reaffirmed Romania's
desire to strengthen links with "all socialist coun-
tries." The article also condemned "imperialism"
for using tactics such as "domination and dictate...
economic and political pressure...the installment of
puppet regimes...and even overt military interven-
tion." While the imperialist villains were not
specifically named, the Soviets will undoubtedly
see in the article still another infuriating example
of Romania's edging toward Peking's line.
Soviet anger over closer cooperation between
China and Romania will increase still more if a re-
ported visit of a Chinese military delegation to
Romania takes place later this month. If the Soviets
wish to turn the pressure on Romania up another notch,
a Warsaw Pact exercise reportedly scheduled to take
place in Bulgaria later this month may offer an op-
portunity for various kinds of intimidation tactics.
Although such moves would clearly worry the Romanians,
Bucharest still seems determined to defend its in-
dependent stance.
12 Aug 71
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CYPRUS: Monday's meeting between the Greek and
Turkish Cypriot negotiators produced no break in the
stalemated intercommunal talks, and there are in-
creasing signs that President Makarios will take the
issue to the UN.
According to Gl.afkos Clerides, the Greek Cypriot
negotiator, the Turkish Cypriot letter of 9 August
offers no hope for progress in the intercommunal
talks. Clerides stated that the Turkish Cypriots re-
asserted their demands that communal authority extend
to the top level of government and that the Greek
Cypriots renounce er.osis--union of Cyprus with Greece.
The talks have been stalemated for some time over
the issue of the degree of local autonomy for the
Turkish Cypriots. Recently, the Turkish side has ac-
cused Makarios of sparking potential trouble on the
island with renewed talk of enosis, an issue that had
lain dormant for twc years.
The US Embassy in Nicosia believes that the Turk-
ish Cypriots' firm stand is an attempt to put the onus
of ending the talks on the Greek Cypriots, who are
scheduled to respond, to the Turkish Cypriot position
in late August. If this next meeting fails to break
the deadlock, most observers agree that the inter-
communal talks will be suspended pending the outcome
of bilateral Greek-Turkish discussions now set for
September.
President Makarios, however, is fearful of an
imposed Greco-Turkish solution and may ask the UN
secretary general to help in seeking a new formula
that would keep the talks alive. Should Makarios
follow this course, which seems increasingly likely,
he would be hoping to pre-empt the Athens-Ankara
dialogue and to maintain the status quo on the island.
12 Aug 71 Central Intelligence Bulletin 2
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ARAB FEDERATION: Egypt, Libya, and Syria are
taking additional steps toward the establishment of
the Federation of Arab Republics (FAR).
The leaders of the three countries--Sadat,
Qadhafi, and Asad--a.re meeting today in Damascus to
approve the constitution and basic principles of the
new federation, but these reportedly are not to be
made public until after 15 August. Previous indica-
tions have suggested, however, that the structure of
the new federation will be much looser than the uni-
tary state that was established between Egypt and
Syria in 1958 and that FAR will be only a nominal
union within which each state will retain its sover-
eignty.
On 1 September, a popular referendum on partici-
pation in FAR is scheduled to be held in all three
countries. In Libya, seminars and "enlightenment
committee" meetings are reportedly being held through-
out the country to explain the federation to the
citizenry. The US Embassy in Tripoli expects an af-
firmative vote of close to 100 percent in the referen-
dum, but this margin will not accurately reflect pub-
lic opinion.
Shortly after his successful countercoup on 22
July, President Numayri of the Sudan announced that
his country would join the federation in January.
There is known to be considerable opposition within
the Sudan to joining the federation, however, and
its participation remains in doubt. 25X1
12 Aug 71 Central Intelligence Bulletin
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PORTUGAL: National Assembly approval of Prime
Minister Caetano's modest press bill may be a cau-
tious step to conciliate liberal critics.
The law, passed on 4 August during the special
session on constitutional revisions, permits journal-
ists to publish articles without prior government
censorship. The government, however, will continue
to monitor the press for articles which "might-en-
danger the nation's security, prestige,'or morality."
Authors or publishers of such articles are subject
to legal, action. The new law also gives the govern-
ment power to reimpose censorship when a state of,
emergency is declared or when serious acts.of-sub-
version occur. Thus, officials still have a wide
range of latitude to. decide what information is
suitable for public consumption..
Local journalists are divided in. their reac-
tions. One group claims the law is a step backward
because prior censorship protected journalists from
possible fines and imprisonment after the fact.
Other journalists, arguing that the Portuguese
Government will be reluctant to punish:authors for
articles which have :been widely disseminated for
public scrutiny, assert that the new law will facil-
itate responsible and lively journalism.. The pas-
sage of implementing legislation spelling out details
during the coming months will determine whether or
not Portugal. is in fact moving toward a free press
and a more open society.
The press law is typical of Prime Minister
Caetano's balancing policy of moving toward gradual
liberalization to appease leftist elements, while
placating rightists :by leaving considerable power
in the hands of the government. Right-wingers who
may believe that greater press freedom will under-
mine government authority probably take comfort in
the fact that the government recently initiated a
rigid crackdown on persons and organizations sus-
pected of Communist-linked activities.
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EAST GERMANY - WEST GERMANY: Bonn has suspended
steel imports from East Germany except for those un-
der existing contracts.
This stringent step was taken because of Pan-
kow's flagrant attempts to transship Bulgarian and
Romanian steel into West Germany, thus violating
the tariff and tax-free provisions of the interzonal
(IZT) agreement and the special inter-German trade
provisions of the European Community treaties. West
Germany took swift action to ensure compliance with
the IZT agreement, in part because of earlier com-
plaints from Bonn's EC partners about violations.
East Germany, faced with persistent shortages
of steel, may have elected to ship the steel (with
visible foreign markings) rather than default on
its contracts with West German customers. A high-
ranking West German official believes, however, that
it was a deliberate attempt by some East German of-
ficials to exploit the IZT arrangements.
The effect of the ban on current East German
shipments may not be great, because contracts for
most deliveries this year have already been con-
cluded. Nevertheless, West German purchasers of
GDR steel may turn elsewhere for 1972 import con-
tracts if Pankow cannot convince West German im-
porters that it has sufficient steel available for
export and arrange a lifting of the ban.
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SOMALIA: The military government's deep suspi-
cion ooffforeigners appears to have intensified.
In recent weeks, a locally employed Briton was
summarily expelled from the country and a number of
West German aid personnel departed after they were
abruptly told to leave the agricultural projects on
which they were working. Several local employees of
the US Embassy have been detained without being of-
ficially charged. Embassy officers have also had
some difficulty in training consular access to a US.
citizen currently stranding trial on a relatively
minor charge.
The government's moves against foreigners may
,reflect a mood of high-level insecurity stemming
from the recent upheavals in Sudan. Leaders of the
Somali military government closely identify with the
revolutionary Arab government in Khartoum, and they
may believe that the recent coup in Sudan could in-
spire an anti ov ment move in Somalia.
I T
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EQUATORIAL GUINEA - SPAIN: The frequently trou-
bled relations between Madrid and its only former
colony in black Africa appear to have stabilized for
the time being.
Nine basic economic and technical accords be-
tween the two countries were finally signed in late
July after several months of negotiations. The agree-
ments provide for -the subsidized purchase by Spain
of the entire Guinean cocoa crop and for the equiva-
lent of over $7 million of technical assistance and
grant aid for the remaining calendar year. The agree-
ments contain a proviso that Madrid will offer sub-
sequent help on a yearly basis, with aid levels de-
pendent on the state of relations between the two
countries.
Guinea's intensely nationalistic and unpredict-
able President Macias established extensive contacts
with Communist and radical African countries over
the past year, but apparently was unable to obtain
sufficient aid from them to replace that of the for-
mer metropole. He probably felt compelled to renew
the basic accords with Spain to help keep his eco-
nomically pressed country afloat. Cocoa exports are
Equatorial Guinea's mainstay, but this year's crop
is jeopardized by Macias' continuing delay in sign-
ing a pending contract-labor treaty with Nigeria to
replace the 20,000 laborers driven out during a fu-
tile "Guineanization" drive.
There are no indications that Macias will soon
abandon his leftist stance or anti-Spanish sentiments,
which have severely strained relations with Madrid
in the past, but his public attacks may be muted for
the moment. Reportedly, Macias already has advised
the country's single party that friendship with Spain
is the byword of they day. F_ 7
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AN G O L A ZAMBIA
s-.w (Port.)
SOUTH-WEST AFRICA
(International Territory)
SALISBURY
SOUTHERN
RHODESIA
f U. K.)
financing jeopardized
Shashi copper- nickel deposit
BOTSWANA
MOZ.
(Port:)
O PRETORIA LOUREN(O
MARQUES
Johannesburg N
d MBABANE .
SWAZILANDI
Bloemfontein
SOUTH AFRICA
Cape
Town
Pietermaritzburg
Durban
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INTERNATIONAL MONETARY DEVELOPMENTS: Specula-
tive activity generated by a congressional subcom-
mittee report warning of a possible dollar devalua-
tion is apparently wearing off. The report has re-
ceived relatively low-key coverage in the European
press. The US dollar continued to strengthen slightly
yesterday after heavy pressure Monday forced its ex-
change rates in relation to certain European curren-
cies to its lowest :Level since World War II. Because
of profit taking, free market gold prices in London
dropped to $42.85, down from the closing price of
$43.94 Monday. The firming of the dollar suggests
that the present wave of speculation ma be ebbin
but the situation remains volatile. 25X1
BOTSWANA: The decision of a West German firm
to pull out of Botswana's $200-million copper-nickel
Shashi mining project could delay the country's ma-
jor program to achieve economic viability. The
firm's decision ostensibly was caused by the West
German Government's refusal to insure the project
fully against political risk. Development of the
rich Shashi deposits would help free Botswana from
dependence on British budgetary subsidies and would
reduce the country's reliance on a customs union dom-
inated by South Africa. The decision of the firm to
cancel its commitment to purchase the eventual output
of the mines has possibly jeopardized financing from
the West German Government and the International
Bank for Reconstruction and Development for a major
portion of the project's capital requirements. If
financing arrangements fall through, initial mining
operations may have to be postponed well beyond the
scheduled target date of 1973. 25X1
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