THE PRESIDENT'S DAILY BRIEF 27 DECEMBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007632
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: December 27, 1973

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The President's Daily Brief
27 December 1973
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? Exempt from general
declassification schedule of E.O. I 1652
exemption category 5B( I),(2).(3)
.declassified only on approval of
the Director of Central Intelligence
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THE PRESIDENT'S DAILY BRIEF
December 27,. 1973
PRINCIPAL DEVELOPMENTS
Syria
//(Page 1) .
The Arab oil exporters' decision to increase output
in January will restore world oil supplies about to
the level of last September, apart from the amount
involved in the embargoes against the US and the
Netherlands. (Page 3)
Egypt
The Soviet ambassador in Laos predicts that the
Pathet Lao soon will begin negotiations toward a
new coalition government. (Page 5)
The Korean prime minister has appealed to opposi-
tion forces to enter a dialogue with the government.
(Page 6)
Notes on the further strengthening of the dollar,
the new Cambodian cabinet, Soviet
and the Soyuz landing appear on Page 7,
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ARAB STATES - ISRAEL
(continued)
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Israeli and Egyptian military negotiators met
in Geneva yesterday for the first disengagement talks
since discussions broke down last month at Kilometer
101. Both sides apparently reiterated the initial
positions that had caused the breakdown: the Is- ,
raelis calling for a mutual withdrawal of Egyptian'
and Israeli forces to opposite sides of the Suez
Canal, and the Egyptians demanding that Israel evac-
uate all but about one third of the Sinai peninsula.
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INTERNATIONAL OIL
The Arab oil exporters' decision on Christmas
Day to replace the 5-percent cutback in output
scheduled for January with a 10-percent increase
will mean a rise of about 2 million barrels per day
in world oil supplies over December levels. Sup-
plies will still be some 3 million b/d below Septem-
ber's output and over 4 million b/d less than the
output that had been projected for January before
the Middle East war. The 3 million b/d reduced sup-
ply of oil is roughly equal to the amount that the
US and the Netherlands would lose if the embargoes
were strictly applied against them.
Despite the embargo, the US probably will con-
tinue to receive at least a share of the available
oil proportionate to its pre-crisis imports. Well
over 500,000 b/d of Arab and non-Arab crude may al-
ready be diverted from normal channels to the US,
and another 500,000 to the Netherlands. As the
Arabs increase production, the amount diverted will
probably increase. Thus the US will lose relatively
little of its total supply, perhaps no more than 5
percent.
Serious economic dislocations next spring now
seem unlikely in Europe and Japan, but economic
growth rates will be substantially below pre-October
projections.
The earlier decision by Persian Gulf, members
of OPEC to raise prices $4 a barrel, when matched
by other OPEC producers, will double the world oil
bill in 1974 to about $100 billion, assuming little
or no growth in consumption by major oil importing
countries. The additional cost resulting from the
new hikes will be about $10 billion for the US,
$23 billion for Western Europe, and $8 billion for
Japan.
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EGYPT
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USSR-LAOS
The Soviet ambassador in Laos predicts that
the Pathet Lao will agree early in 1974 to begin
negotiations toward a new coalition government.
According to Ambassador Vdovin, Soth Phetrasy, the
senior Pathet Lao representative in Vientiane, has
told him the Communists will soon drop their condi-
tion for neutralization of the two capitals before
negotiations could begin. Phetrasy recently returned
from consultations in Hanoi and Sam Neua and could
be carrying new instructions.
Vdovin informed the US charge on December 24
that he would do everything possible to facilitate
the negotiations. Earlier he had told the British
ambassador he might go to Sam Neua to try to con-
vince the Pathet Lao that Prime Minister Souvanna
is acting in good faith.
Vdovin acknowledged that the Pathet Lao had
delayed implementation of the Lao accords. He
agreed that this probably results from concern over
the physical security of their leaders as well as a
desire to accommodate their North Vietnamese allies,
who may--for reasons of their own--be opposed to the
early formation of a Lao coalition government.
Vdovin believes Peking is satisfied with the
agreement in Laos and is supporting Souvanna's ef-
forts toward the early formation of a new govern-
ment. Vdovin's moderation on the subject of the
Chinese probably owes much to the recent Chinese
withdrawal of about 4,000 antiaircraft artillery
forces from Laos. This reduces Peking's overall
strength there to some 25,000 engineer, infantry,
and support troops. Withdrawal of these forces
remains a major Soviet goal.
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SOUTH KOREA
In an address to the nation yesterday, Prime
Minister Kim Chong-pil told domestic critics that
the government would not bend to demands for politi-
cal reform and revision of the constitution. He ap-
pealed to opposition groups to end their dissent and
to institute, instead, a quiet dialogue with the re-
gime. He implied that continued unrest would lead
to repressive government action.
Kim's statement was prompted by the recent at?
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tempt by 30 prominent South Koreans to petition pub-
licly for reform. The Prime Minister hopes to avoid
a head-on confrontation between the unyielding Presi-
dent Pak and his critics--Christians, students, in-
tellectuals--who want to reduce presidential author-
ity. In an effort to strengthen his appeal, Kim
emphasized that continued instability in South Korea
would benefit the North.
The Prime Minister's remarks are not likely to
ease the situation. Should the present pattern of
dissent persist, a serious confrontation may well
occur in the next month or two.
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NOTES
International Monetary Developments: The new
price of Persian Gulf crude oil has led to further
strengthening of the dollar in international money
markets. The price increase has more seriously af-
fected European and Japanese economies than the US
because of its adverse impact on importers' balance
of payments and domestic price levels. In Tokyo,
the dollar rate is above the 300 yen level in the
forward market and dealers expect further devaluation.
In Paris, the dollar closed yesterday at a new post-
devaluation high against the franc, and gains against
other European currencies should be reflected today.
Cambodia: Prime Minister Long Boret's new
16-man cabinet--announcedin Phnom Penh yesterday--
holds out some hope for improvement over its prede-
cessor, according to an initial assessment by the US
Embassy. It contains much less dead wood and the
portfolios have for the most part been distributed
more rationally. President Lon Nol's Socio-Republican
Party dominates the cabinet, but Sink Matak's Repub-
lican Party, the "independents," and the military are
also represented. The new ministers meet today to
address such problems as the teachers' strike, a
lagging conscription drive, and general economic
malaise.
USSR:
USSR: Soyuz 13 with two cosmonauts aboard landed
yesterday after an eight-day mission. According to
TASS, both cosmonauts are in good health following a
successful recovery.
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Top Secret
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