THE PRESIDENT'S DAILY BRIEF 19 SEPTEMBER 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007820
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: September 19, 1974

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The President's Daily Brief
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September 19, 1974
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Exempt from general
declauification schedule of E.O. I 1652
exemption category 5B( I
declassified only on approval of
the Director of Central Intelligence
r.)
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FOR THE PRESIDENT ONLY
September 19, 1974
Table of Contents
Turkey: Ecevit says it may take several weeks to
form a new government. (Page 1)
OPEC: Our analysis of the latest OPEC formula and
of prevailing prices suggests that increased
costs to producing companies will be 40 to 50
cents per barrel. (Page 2)
OAS-Cuba: A resolution to reconsider sanctions
against Cuba will be discussed today at a meet-
ing of the permanent council. (Page 3)
Cuba: Cuba's economic outlook has brightened con-
siderably this year. (Page 4)
North Korea: Pyongyang has turned to the West for
major supplies of modern machinery and equip-
ment. (Page 5)
Notes: Syria-Israel; India; France - Saudi Arabia
Egypt (Page 6)
FOR THE PRESIDENT ONLY
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FOR THE PRESIDENT ONLY
TURKEY
President Koruturk, as expected, ac-
cepted Prime Minister Ecevit's resigna-
tion yesterday and has asked him to con-
tinue in office until a new government
can be formed.
Ecevit has told US Ambassador Macomber that it
might take three to four weeks to form a new govern-
ment, but assured him that this would not inhibit
Turkish policy regarding Cyprus. He claimed that
even the matter of making concessions in order to
reach a political settlement could be handled during
an election campaign.
There is little doubt, however, that Ecevit's
leadership on the Cyprus issue will be affected and
that concessions will be harder to make during a
campaign. The Greeks have concluded that Cyprus will
shortly take a back seat to politics in Turkey, and
the Karamanlis government reportedly is even more
eager than before to use the opportunity to hold its
own national elections prior to the end of the year.
Once Koruturk has consulted with political
party heads, he will, in all likelihood, name Ecevit
to form another government. Ecevit's Republican
People's Party has the largest representation in the
450-seat National Assembly, although it falls 41
votes short of a majority.
Democratic Party leaders have indicated they
favor Ecevit's plan for early elections and Ecevit
told Macomber that a coalition with the Democrats,
which would give him a majority, was "likely, al-
though not certain."
If Ecevit fails to organize.a_majority coali-
tion, the President could still.ask him to form a
minority government or he could ask.another.politi-
cal leader to try to form a government. .In the lat-
ter case, there would probably be an effort to form
a rightist coalition.
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FOR THE PRESIDENT ONLY
OPEC
A straight application of the OPEC
formula increasing member governments'
take by 3.5 percent would indicate that
the weighted average cost to the produc-
ing companies for crude oil will increase
by at least 33 cents, to $9.84 per barrel.
Our analysis of the outcome of the OPEC
meeting last week and of prevailing
prices suggests, however, that the in-
crease will be closer to 40-50 cents.
company profits
on their crude oil operations in the Gulf are on
the order of 40 to 50 cents per barrel. If this
is correct, it is likely that most of the increased
cost of oil will be passed on to the consumer.
Saudi Arabia was the dissident at the OPEC
conference. The Saudis would not go along with
the increases in royalties and taxes. They did
say, however, that they would raise the average
price of Saudi oil about 13 cents per barrel--still
20 cents below the stated objective of OPEC.
This would make Saudi oil the cheapest in OPEC.
We believe, however, that the Saudis were posturing,
and as in the past when the time comes to settle
accounts with Aramco, the Saudis will insist on
receiving retroactive revenue that will at least
equal the OPEC formula. Aramco will doubtless
price its oil with this in mind.
Other decisions at the OPEC conference included:
--As of January 1975, the rate of inflation
in industrialized countries will automatically
be taken into account when the oil producers
adjust prices.
--A working committee will study a new system
for long-term oil pricing.
--A study will be made on the subject of sup-
ply and demand. In the meantime, a number of
countries reportedly have decided to cut back
production.
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FOR THE PRESIDENT ONLY
OAS-CUBA
The resolution to reconsider sanctions
against Cuba will be discussed today at a
meeting of the permanent council. There is
practically no opposition to raising this
question, but debate may develop over the
lack of any mention of Cuban subversion
in the resolution.
The? three sponsoring governments--Costa Rica,
Venezuela, and Colombia--prefer to avoid the sub-
version issue. They fear that Castro would react
unfavorably to any new OAS effort to hold him up
to judgment, and that this would cancel out the
progress that has been made toward normalizing
Cuba's relations in the hemisphere. Brazil, Chile,
Uruguay, and Bolivia have noted the draft's fail-
ure to raise the question, however, and will pre-
sent amendments. Whatever terms are finally en-
dorsed, an examination of the issue seems assured.
A meeting of foreign ministers to take the
final tally for and against continuing the sanc-
tions will probably be scheduled for November.
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CUBA: FOREIGN TRADE
Million US $
2200 I
2000
1800
1600
1400
1200
1000
800
600
400
200
SOURCE OF IMPORTS
100%
Non-
Communist
Countries
Other
Communist
1
Countries
USSR
0
1971
1972
1973
1974
Provisional Projected
IMPORTS
.=
0
1971
556629 9-74
t--,
---
-
SUGAR
-
EXPORTS
-
-"=
1972 1973 1974
Provisional Projected
?
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FOR THE PRESIDENT ONLY
CUBA
The economic autloak_far_Cuba has
brightened considerably _this. year. The
improvement, which has put the economy
on the soundest footing.sinca Castro
took over, is due to:
--A tripling of world sugar prices.
--A good sugar harvest of six mil-
lion tons.
--A substantial increase in eco-
nomic assistance from non-communist
countries.
Export earnings, almost all from sugar, are
likely to jump more than 65 percent, to $2.2 billion
in 1974. This would enable Havana, for the first
time under Castro, to avoid a trade deficit.
Because of the sharp rise in price, Cuba will
earn more than $1 billion from the sale of 35 per-
cent of the sugar crop to non-communist countries,
compared with $320 million in 1973. The rest of
the crop is being sold to communist countries, prin-
cipally the USSR.
Increased imports from non-communist countries
this year will go a long way toward neutralizing
the lingering effects of the US denial program. Im-
ports of several thousand US--designed Argentine auto-
mobiles and trucks, under a $1.2-billion Argentine
trade credit, will assist the ailing transport sec-
tor. Credit purchases of Canadian.locomotives and
coastal tankers will also help.
Over the next several years, economic assistance
from non-communist countries probably will average
about $250 million a year. This is about half the
amount Cuba receives from communist countries.
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FOR THE PRESIDENT ONLY
NORTH KOREA
Pyongyang has quietly turned to the
West for major supplies of modern machin-
ery and equipment.
This is a deliberate policy shift to reduce
North Korea's dependence on the USSR and other com-
munist countries for capital equipment. The plant
import program is aimed at developing export-ori-
ented industries and at strengthening industries
supplying goods for agriculture, food processing,
and consumer manufacturers.
The North Koreans also have attempted to cir-
cumvent the US trade embargo by working through
third parties. Pyongyang seems particularly inter-
ested in US-made mining equipment and aircraft.
Since 1970 the North Koreans have signed con-
tracts with firms in Japan and Western Europe for
more than $500 million worth of industrial plants
and related equipment. Current negotiations could
increase the value of the plant import program to
$1 billion. Medium-term Japanese and West European
credits--for record grain imports as well as for
capital imports--permitted North Korea to run a
trade deficit with non-communist trading partners
of almost $170 million last year.
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Syria-Israel:
NOTES
India:
will
take place in late September or early October. The
source said the test has been scheduled earlier
than originally planned because analysis of the
first one has been completed and because the govern-
ment believes the time is politically appropriate.
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