THE PRESIDENT'S DAILY BRIEF 30 JANUARY 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007660
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 30, 1974

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The President's Daily Brief
January 30, 1974
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Exempt from general
declassification schedule of E.O. I 1652
exemption category 523( I
declassified only on approval of
the Director of Central Intelligence
S. .P
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
January 30, 1974
PRINCIPAL DEVELOPMENTS
The USSR and East European countries are also going
to have to pay considerably higher prices for Arab
oil. The Iraqis, for example, are insisting that
Moscow pay the price now being asked of Western cus-
tomers--about $17 per barrel. (Page 1)
The Belgian Government announced yesterday that it
intends to use the EC Council session today for de-
bate on the future of the community. The target is
France
(Page 2)
The South Vietnamese are trying to exploit Hanoi's
?obvious embarrassment over China's seizure of the
Paracels. (Page 3)
Moscow sold nearly 300 metric tons. of gold for more
than $900 million last year. (Page 4)
\Soviet(
I (Page 5)
Notes on Vietnam, Bulgaria, the USSR, and Australia
appear on Page 6.
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USSR - ARAB STATES
The Soviets too are probably going to have to
pay considerably higher prices for Arab oil. Earlier
this month, Iraq reportedly stopped shipping crude
oil purchased by the USSR until a dispute over prices
is resolved. Baghdad is insisting that Moscow pay
the price now being asked of Western customers--about
$17 per barrel. As a result, Soviet plans to obtain
400,000 barrels per day of Iraqi oil during 1974--
three times the estimated 1973 level--may be in jeop-
ardy. Soviet purchases probably would be on a barter
basis, as in the past.
The Soviets and East Europeans have encountered
similar problems with other Arab oil producers. So--
viet purchases of crude from Libya apparently ceased
late last year when Tripoli notified Moscow that it
would not load Soviet tankers unless Moscow paid
higher prices. Syria has refused to export oil ?to
Hungary under a 1973 contract calling for a price
of $5.50 per barrel. Damascus is offering to deliver
crude oil this year at a price of $18 per barrel, but
Budapest is waiting for the USSR and Bulgaria to con-
clude price agreements with Syria.
Little of the oil purchased by Moscow is des-
tined for the USSR, which is self-sufficient in
crude oil. Most of the oil purchased abroad is sent
to Eastern Europe, which relies on the Arabs for some
15 percent of its imports. If Arab oil deliveries
to the USSR are substantially reduced, Moscow prob-
ably will continue to provide most of Eastern Europe's
needs by cutting back on exports to the West. Even
if the volume of Moscow's sales to Western Europe
declined, however, Moscow's hard currency earnings
would rise as long as sales are made at current high
prices.
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BELGIUM
The Belgian Government announced yesterday that
it intends to use today's European Community Council
session to begin debate on the broad question of the
community's future development. The real object of
the debate will be the French
The Council had been called
into session exclusively to resolve the contention
over regional development policy.
Brussels has now Made publicly clear its grow-
ing pessimism over the drift of EC affairs, in which
the smaller members are being reduced to pawn's in,
the struggle for national advantage by the larger
powers. Belgian feeling was crystallized by the
French decision to float the franc, one consequence
of which was to force the Belgian franc into the
emerging Deutschemark zone.
The Italians and Dutch share Belgium's dissatis-
faction. Both countries are tending to put more
emphasis on ties. with the US, while at the same time
deploring the community's failure to push ahead with
unification.
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VIETNAM-CHINA
The Thieu government is trying to capitalize
on Vietnamese Communist embarrassment over Saigon's
recent clash with the Chinese in the Paracel Islands.
South Vietnamese delegates to both the bilateral
talks in Paris last week and the Joint Military Com-
mission in Saigon this week have proposed that the
Viet Cong join them in protesting China's "armed
aggression." The Viet Cong, of course, refused.
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USSR-GOLD
Moscow earned more than $900 million from the
sale of nearly 300 metric tons of gold last year.
This is a record high; the Soviets had sbld 158
metric tons of gold for nearly $300 million the year
before...
The Soviets resumed large-scale gold sales in
1972, after a six-year hiatus, to help finance a
record $1.4 billion hard-currency trade deficit re-
sulting from large grain imports. Imports of grain
last year contributed to an even greater hard-currency
trade deficit. The record .gold sales probably covered
'about half of last year's deficit.'
The USSR probably will not have to sell gold to
balance accounts in 1974.. Its hard-currency balance
of trade should improve considerably, largely because
of reduced grain imports and higher prices for its
oil exports,
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Soviet AN-22 heavy transportl
7.;
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USSR
The AN-22 is Moscow's largest aircra t;
it is slightly smaller than the US C-5A.
When production of the AN-22 began in 1967,
the Soviet press indicated that 100 would be built.
Initially, the Soviets had problems with the per-
formance ?of the aircraft; excessive vibration may
have been responsible for the crash of two AN-22s
during long international flights. They performed
well, however, during the airlift last October.
Until this is
produced, however, the Soviets will continue to rely
heavily on the AN-12, the medium transport that has
been the workhorse of the Soviet fleet, as well as
Moscow may also be able to supple-
ment its present capability by using a new medium
transport, the IL-76, four or five of which have
already been produced.
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NOTES
Vietnam: Troop infiltration to South Vietnam
continues. Intercepted messages suggest that North
Vietnamese infiltration groups have entered the sys-
tem almost daily in recent weeks, all of them headed
toward central and southern South Vietnam. Total
infiltration for the 1973-74 dry season now amounts
:to about 48,000 troops. An intercept of January 22
from aAraining camp in central North.Vietnam-dis--
closed that another 2,700 fresh troops will be sent
south soon, apparently after they return from Tet
leave. According to the message, about 1,600 of
these will go to South. Vietnam and 1,100 to central
Laos.- These will be the first troops to go to the
Lao panhandle since November.
Bulgaria-US: On January 26, Kaiser Industries
and the Bulgarian Ministry of Foreign Trade signed
a memorandum of understanding on industrial and eco-
nomic cooperation. The memorandum calls for Kaiser
to produce studies on a number of high-priority
projects, including a 12-million-ton steel complex,
a large cement plant, reconstruction of port facili-
ties, and possibly an aluminum combine. Kaiser es-
timates the potential value of the projects at $5-
$20 billion over a 20-year period. Kaiser will
seek financing from government as well as private
sources, and is willing to be repaid largely in
products. Only three days before, a similar agree-
ment was signed by Kaiser in Moscow.
USSR: The Soviets yesterday brought back to
earth an unmanned Soyuz spacecraft that had been
in orbit since November 30. The 60-day flight prob-
ably was a test of the endurance of the Soyuz cap-
sule in preparation for longer manned missions with
a Salyut space station.
Australia: Australian Prime Minister Whitlam
has assured Kuala Lumpur that Canberra is willing
to keep an air squadron in Malaysia as long as the
Malaysians want it. Australia withdrew its ground
combat contingent late last year from the five-
power defense arrangement with the UK and New Zea-
land covering Malaysia and Singapore, and had indi-
cated that it would remove its air unit by mid-1975.
Whitlam's promise should help convince Malaysia and
Singapore that his Labor government remains interested
in contributing to their security, despite Labor's
basic opposition to the stationing of Australian
troops abroad.
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Top Secret
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