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CIA-RDP79T00975A022900030001-4
Body:
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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
State Department review completed N2 41
30 SepteTnber 1972
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SECRET
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No. 0235/72
30 September 1972
Central Intelligence Bulletin
PANAMA - UNITED NATIONS: Government pressing for
Security Council meeting in Panama City. (Page 1)
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MEXICO: Security forces on alert for disturbances
Page 6)
SWEDEN: Recognition of East Germany (Page 6)
CEMA-IRAQ: Observer status (Page 7)
INDONESIA: First foreign exchange surplus (Page 8)
NEW ZEALAND: Severe flooding will hurt exports
(Page 81
URUGUAY: Beef ban (Page 8)
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IPWAMA - UNITED NATIONS: The government is
mount g a major campaign to have the Security
Council meet in Panama City.
Foreign Minister Tack told the US ambassador
this week that Panama already has the support of
11 of the 15 Council members and he requested US
support. The Panamanian ambassador to the UN told
US officials that French Foreign Minister Schumann
has offered his government's full support. Panama,
which now has a temporary seat on the Council, wants
the meeting in March when its ambassador will be
the Council chairman.
A Council meeting in Panama would not only
raise Torrijos' international prestige and satisfy
Panama's nationalistic longings but would provide
an unparalleled forum to focus world attention on
the canal negotiations.
The government seems to believe it will have
to use pressure tactics to get a, satisfactory
treaty and that international diplomatic support
and widespread publicity would give it important
negotiating leverage. Panama's ambassadors to
Brazil, Uruguay, and Peru have recently issued
statements publicizing Panama's claim to sover-
eignty over the Canal Zone in an attempt to mobilize
public opinion in these countries. The Panamanian
ambassador to the UN admitted that any Council meet-
1
ing in Panama would be used to get his country s
case on the canal before American public opinion.
30 Sep '72
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NOTES
MEXICO: Security forces in the capital are on
spe ia1 alert this weekend to guard against possible
hit-and-run bombings by radical dissidents. Offi-
cials believe that the anniversary on 2 October of
the 1968 Tlatelolco student massacre may provoke
bombings similar to those before President Echever-
ria's state of the nation address and Independence
Day celebrations earlier this month. The possibil-
ity that maverick labor leaders would support stu-
dent protests, however, was lessened during the week
when two dissident unions came to terms with the ad-
ministration and joined government-affiliated unions.
These moves are an important success for Echeverri.a
in his efforts to promote labor harmony. Meanwhile,
security forces made some progress in their campaign
against Lucio Cabanas' guerrilla organization by
capturing nine members of his band. Information
from the prisoners will facilitate the security
forces' search for the elusive Cabanas, whose capture
would significantly reduce the effectiveness of Mex-
ico's most trousome guerrilla movement.
SWEDEN: The Social Democratic Party congress
which convenes on 1 October may call for recognition
of East Germany. The congress will write the plat-
form for next year's election. Swedish Prime Minis-
ter and party chairman Olof Palme will strive for a
program aimed at recouping losses the party suffered
in 1970 when it failed to sustain a clear-cut major-
ity in parliament. Palme has consistently wooed the
left during the interim and can be expected to tailor
the new platform accordingly. Party leaders report-
edly are split over whether to resolve simply to
recognize East Germany without specifying a time or
to call for "immediate" recognition. As an election
issue, recognition of Pankow probably will have lit-
tle impact on most Swedish votegs. who are smarti:n
from high taxes and inflation.
(continued)
30 Sep 72 Central Intelligence Bulletin 6
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CEMA-IRAQ: Iraq probably will soon be accorded
observer status in the Soviet-dominated Council for
Mutual Economic Assistance, according to a Soviet
Foreign Ministry official. Baghdad has achieved some
successes in marketing its oil in the Soviet Union
and Eastern Europe recently and undoubtedly hopes
that a CEMA arrangement will facilitate an expansion
of the market. Moscow has been trying to make CEMA.
into a more significant economic entity. Iraq would
be the first non-Communist country associated with
CEMA; in addition to the Warsaw Pact countries, Mon-
golia and Cuba are full members, and Yugoslavia
North Korea, and North Vietnam are observers. II
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(continued)
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INDONESIA: Djakarta has achieved a surplus for-
eign exchange position for the first time since the
beginning of the Suharto regime. The improvement of
about $150 million, mainly the result of increased
oil exports and rapid inflows of short-term capital,
could well be temporary, however. It is possible
that part of the short-term inflows may reflect cap-
ital flight from the Philippines which could be re-
versed quickly. For its part, Djakarta is concerned
that the improvement might lull the country's pres-
ent aid donors i reducing their support.
'NEW ZEALAND: Flooding in the South Island will
undofrhEedlly damage the country's export performance
this year. Farmers, still recovering from floods in
June, suffered severe losses of crops and livestock
as floods again swept the area during the height of
the lambing season. An estimated 30 percent of the
lamb crop in one of the major sheep farming areas
has been lost and the number will probably increase
because of cold weather and feed shortages. Sheep
farming alone is responsible for more than one third
of New Zealand's export earnings.
URUGUAY: The ban on domestic consumption of
exportable beef, a keystone of President Bordaberry's
battered economic reform program, has failed so far
to divert beef into official export channels. In-
stead, ranchers have increased cattle smuggling to
Brazil, where live cattle prices are nearly 50 per-
cent higher. Extremely high world beef prices have
buoyed up export earnings, but producers' incentives
to sell cattle through official channels are reduced
by export taxes imposed under the stabilization pro-
30 Sep 72
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